Dentsply Falls Despite Profit, Outlook

The stock fell 30 cents to close at $39.71, but had spiked as high as $42.11 earlier in the day.

The company's quarterly profit met Wall Street expectations and sales topped forecasts. Dentsply expects a continued rise in profit and revenue in 2008, on a mix of orthodontic product sales and strong international sales buoyed by the weaker dollar.

Wall Street maintained a positive outlook on the company, citing its position in the growing dental products market.

Lehman Brothers analyst Steven Postal reaffirmed a "Overweight" rating with a $42 price target. He considers the company's 2008 profit guidance of $1.83 to $1.88 per share conservative, and maintained 2008 and 2009 profit forecasts of $1.88 and $2.10 per share, respectively.

"We highlight our belief that this company can grow organically at two times global economic growth," he said in a note to investors. "With sustained and modestly expanded margins, minimal working capital and capital spending needs, the cash flow characteristics of Dentsply's business are very attractive."

Robert W. Baird analyst Jeff Johnson also reaffirmed a "Outperform" rating with a $48 price target, and said the company is poised to continue benefiting from several industrywide growth drivers. The company already holds either the top or just below the top market position in every category in which it is involved.

"The dental industry is benefiting from many evolving long-term trends, including an increasing worldwide population, a growing segment of adults age 65 and older, the longer retention of natural teeth, and the increasing demand for aesthetic/cosmetic procedures," he said in a note to investors.