| Factor | Score | Distribution | Value | Avg | Rank |
|---|---|---|---|---|---|
Valuation | 75 | 10.7x | 17.8x | Top tier | |
Growth | 41 | -0.9% | 7.1% | Around median | |
Quality | 75 | 16.7% | 4.5% | Top tier | |
Safety | 47 | 1.9x | 2.6x | Around median | |
Capital Return | 93 | — | 2.12% | Top tier | |
Momentum | 82 | 13.8% | 2.9% | Top tier | |
Sentiment | 80 | 10 | 3 | Top tier |
Estimates — analyst targets and a simplified DCF, not investment advice.
Ten ratios that matter, each compared against its sector median and average — so you can see whether a number is rich or cheap relative to peers in the same sector.
Solventum Corporation operates in healthcare technologies through three main segments: MedSurg, Dental Solutions, and Health Information Systems. MedSurg generates revenue from solutions including intravenous injection-site management, negative-pressure wound therapy, and sterilization assurance, while Dental focuses on restorative, cosmetic, and orthodontic materials, and HIS provides revenue cycle management and AI-powered autonomous coding solutions. In Q2 FY2026, MedSurg accounted for approximately $1.4 billion in sales, compared with $396 million for Dental and $354 million for HIS, making MedSurg the largest contributor to the revenue mix.
In Q2 FY2026, sales reached $2.2 billion, up 9.5% organically and 2.2% on a reported basis year over year; however, approximately $125 million of orders placed ahead of the ERP system conversion increased organic growth by approximately 630 basis points, so management estimated adjusted organic growth at approximately 4%. Non-GAAP operating income was approximately $627 million, the operating margin was 28.4%, and adjusted earnings per share were $2.55. The results included a $100 million benefit from tariff recoveries; excluding this benefit and the effect of advance orders, the operating margin was approximately 21.7% and estimated earnings per share were $1.73.
Gross margin in Q2 FY2026 was approximately 60.1%, up 410 basis points from 56%, but was approximately 55.6% excluding tariff recoveries, down approximately 40 basis points year over year. Within the segments, MedSurg grew organically by 8.9%, Dental by 15.2%, and HIS by 5.4%, with advance orders contributing approximately 700 basis points to MedSurg and approximately 10 percentage points to Dental. Meanwhile, EDGAR data for the trailing twelve-month period in 2026 show revenue of $8.3 billion, gross profit of $4.4 billion, net income of $1.4 billion, and earnings per share of approximately $8.16.
The analyst consensus is Buy, with an average target of $91.22, a high target of $113, and a low target of $43; the $70 spread reflects exceptional disagreement over the impact of the transformation and HIS separation. The average target is slightly below the upper end of the 52-week range of $92.71, compared with a low of $62.38, while no displayed price-to-earnings multiple is available to serve as an additional anchor. Therefore, the valuation case is primarily tied to the raised FY2026 outlook, Acera's growth, and the potential to unlock value from HIS, balanced against quarterly earnings inflated by nonrecurring items and separation execution risks.
Figures in the text are as of 2026-08-29; the live price is shown at the top of the page.
Sales reached $2.2 billion, organic growth increased by 9.5%, and adjusted earnings per share reached $2.55. Advance orders totaling $125 million ahead of the ERP conversion contributed approximately 630 basis points to organic growth and $0.34 to earnings per share. A $100 million tariff recovery also added a benefit of $0.48 per share. After excluding these two factors, management estimated adjusted organic growth at approximately 4% and earnings per share at approximately $1.73.
On August 5, 2026, Solventum announced its decision to proceed with the separation of HIS, which generated sales of $354 million and organic growth of 5.4% in Q2 FY2026. The company is considering creating an independent entity or completing a transaction with a broader-scale party, with a focus on maximizing value and using any potential proceeds. Management said HIS is fast-growing and highly profitable and requires a different level of investment and pace of innovation to capitalize on AI-powered autonomous coding. Conversely, the separation could dilute earnings per share, and as of August 5, 2026, the company had not provided a detailed financial impact or a final transaction date.
Automated analysis for informational purposes only — not investment advice.
The company raised its organic growth range to 2.5%–3%, or 3.5%–4% excluding the impact of SKU exits. It also raised its operating margin forecast to 22.2%–22.7%, although this range includes approximately 120 basis points of benefit from tariff recoveries. The adjusted earnings-per-share range increased to $7.10–$7.20, and the free cash flow range increased to $200–$300 million. These forecasts include the HIS segment because the impact of its separation had not been incorporated into guidance as of August 5, 2026.
Management expects organic growth between negative 3% and negative 4% in Q3 FY2026 due to the reversal of most advance orders placed ahead of the ERP conversion. These orders totaled $125 million in Q2 and contributed $0.34 to earnings per share. Management explained that the advance inventory would be consumed quickly during Q3, after which the company would need to rebuild normal inventory levels while dealing with conversion challenges. The company targets a return to positive growth of between 3% and 4% in Q4 FY2026.
The company expects to launch approximately 20 products through Q1 FY2028, with significant Advanced Wound Care launches during the first half of FY2027. Products already supporting results include V.A.C. Peel and Place, three new Attest products, and the global expansion of Tegaderm CHG, as well as ClinPro Clear, Filtek Easy Match, Easy Match Flowable, and Clarity. In HIS, innovation focuses on revenue cycle management and AI-powered autonomous coding applications. Acera, meanwhile, grew by 48% in Q2 FY2026, driven by Restrata synthetic tissue technology.
The company ended Q2 FY2026 with cash and cash equivalents of $403 million and net debt of $4.7 billion. It generated free cash flow of $144 million during the quarter, with improvement expected beginning in Q4 as separation costs decline. Solventum repurchased approximately 4 million shares for $288 million during the quarter, bringing the first-half total to 4.8 million shares for $355 million under a $1 billion program. Management intends to keep future acquisitions complementary and small in scale, similar to Acera, while maintaining strong investment-grade credit ratings.
