Al Root

Shares of healthcare supplier Solventum fell early Friday after the company offered strong fourth-quarter earnings and 2026 guidance.

What gives?

Solventum stock was down 5.4% in premarket trading at $72.81, making it the worst-performing stock in early trading. S&P 500 and Dow Jones Industrial Average futures were down 0.6% and 0.7%, respectively.

The move came after the maker of surgical wound care and oral car products reported adjusted earnings per share of $1.57 on Thursday evening, up from $1.41 a year ago. Sales were $2 billion, up 3.5% year over year on a comparable basis.

Wall Street was looking for earnings per share of $1.49 from sales of $2 billion. Fourth-quarter results don't seem to be the problem.

Surgical sales were $1.2 billion in the quarter, up 5.2% year over year. Dental solution sales were $343 million, up 8.6% year over year.

For 2026, Solventum expects adjusted earnings per share of $6.40 to $6.60. Wall Street currently projects earnings per share of $6.44. Guidance doesn't look like a big problem either.

Margins might have been the problem.

"Overall solid 2025 finish," wrote Stifel analyst Rick Wise in a Thursday report. "Despite the top-line beat, as we detail below, both gross and operating margins came below-Consensus." He blamed the margin miss on the ongoing enterprise resource planning transition. Solventum hasn't been a stand-alone company for that long. It spun off from 3M in April 2024.

A lower-than-expected tax rate also helped Solventum beat earnings. Investors don't like taxes as a source of upside.

"Still, while one-time items did contribute some negative [quarterly] optics, it's clear from the...earnings call that Solventum's underlying business fundamentals and momentum continues to head in a positive direction," added Wise.

For now, investors aren't so sure. They may come around to his way of thinking later.

Wise rates shares Buy and has a $105 price target for the stock. Overall, 33% of analysts covering the stock rate shares Buy, according to FactSet. The average Buy-rating ratio for stocks in the S&P 500 is about 55%. The average analyst price target for Solventum stock is about $92.

Coming into Friday trading, Solventum stock was down about 8% over the past 12 months.

Write to Al Root at allen.root@dowjones.com

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February 27, 2026 08:12 ET (13:12 GMT)

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