Dentsply Sirona: Weak Q3 Earnings and Slow Pandemic Recovery; Investors Gritting Their Teeth

While the 9% year-over-year organic sales decline Dentsply Sirona reported in its third quarter would ordinarily not offer respite for investors, the COVID-19 pandemic’s extraordinary impact on the company last quarter, in which it experienced an over 50% revenue decline, paints the company’s poor performance this quarter in a relatively positive light. Despite the relative sequential improvement, the company’s recovery seems to be notably slower than the other dental companies under coverage. Management continues to stand by its decision to refrain from providing any guidance for the remainder of the year, citing pandemic-related uncertainty. We do not anticipate the company to realize a material recovery in the near term and maintain our $40 per share fair value estimate for no-moat Dentsply.