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Highlights

  • Ansell shares drop 2.7% following Macquarie’s downgrade from “outperform” to “neutral”.

  • Macquarie cites U.S. tariffs affecting 93% of Ansell’s supply chain as a potential headwind.

  • Price target cut to AU$31.05 from AU$40.30, with stock down over 13% year-to-date.

Shares of Australian protective gear manufacturer Ansell Ltd (ASX:ANN) fell by as much as 2.7% on Wednesday, trading at AU$28.60 after Macquarie Group lowered its rating on the stock and revised its price target downward. The downgrade comes amid concerns over newly announced U.S. tariffs that could weigh on Ansell’s global operations.

Macquarie revised its recommendation for Ansell from “outperform” to “neutral”, reflecting increased uncertainty around the company's outlook in light of fresh trade pressures. The firm also cut its price target on Ansell shares to AU$31.05 from AU$40.30, citing the potential impact of U.S. tariff measures announced on 4 April 2025.

Despite Ansell’s expectations that it will be able to fully counterbalance the tariff effects through price adjustments, Macquarie remains cautious. The broker flagged that approximately 93% of Ansell's supply chain is now exposed to U.S. reciprocal tariffs exceeding 10%, which could impact margins and operating efficiency.

Ansell is known for manufacturing a range of personal protective equipment (PPE), including medical gloves and surgical gowns. The company has a substantial global footprint, and the U.S. remains a key market. With the new tariffs in place, the cost implications could ripple through its operations, potentially affecting both suppliers and customers.

“While Ansell aims to mitigate the tariff-related costs through pricing strategies, the high level of exposure to the U.S. tariffs introduces a risk to the overall cost base,” Macquarie noted in its research update.

The share price reaction reflects investor wariness toward external trade risks, particularly those that may affect large portions of the company’s production network. The tariffs are part of a broader set of measures imposed by the U.S. targeting various global imports, raising concerns across several industries with significant overseas manufacturing.

Ansell’s stock has already experienced a decline of 13.1% since the beginning of the year. The latest drop compounds what has been a challenging period for the company on the market, driven by macroeconomic uncertainties and shifting regulatory environments.

Analysts believe that while Ansell maintains a reputable position in the PPE sector, the evolving geopolitical and trade dynamics present hurdles that could impact future earnings visibility.