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Highlights

  • Morgan Stanley lowers Ansell’s price target to AU$33.40, citing downside risk from U.S. tariffs.

  • EPS forecast cut by 9% for FY26 and 11% for FY27, both below consensus estimates.

  • Stock down ~13% year-to-date as volume growth slows in Industrial and Healthcare units

Shares of personal protective equipment manufacturer Ansell Ltd (ASX: ANN) fell 1.3% on Monday to A$29.33 after Morgan Stanley highlighted growing risks to the company’s earnings outlook, driven by U.S. tariff concerns and softening global demand.

The brokerage retained its “equal-weight” rating on the stock but lowered its price target from A$37.20 to A$33.40. The move follows a downward revision of Ansell’s earnings per share (EPS) forecasts, with a 9% cut for FY2026 and an 11% reduction for FY2027. These revised projections sit below current Visible Alpha consensus estimates.

Morgan Stanley noted that while Ansell has expressed confidence in offsetting tariff-related costs through price adjustments, there remains a material downside risk. “The impact of U.S. tariffs on margins could be more significant than anticipated, especially if the company faces resistance in passing through higher prices to customers,” the analysts said.

In addition to tariff pressures, the brokerage flagged reduced revenue growth expectations for both Ansell’s Industrial and Healthcare divisions. Sluggish macroeconomic conditions and weakening demand volumes have prompted the firm to adopt a more conservative outlook on unit performance.

Ansell, known for its medical gloves and surgical apparel, has faced a challenging operating environment post-pandemic, with normalizing demand and rising cost inflation squeezing margins. The company has been attempting to maintain profitability by implementing strategic price increases and enhancing operational efficiency.

Despite these efforts, investor sentiment has remained muted. Year-to-date, Ansell shares are down approximately 13%.