Demant A/S shares advanced 3% on Tuesday following a two-notch upgrade by BofA Securities, which moved the Danish hearing-aid manufacturer from an "underperform" rating to "buy." BofA also lifted its price target to DKK280 from DKK170, representing a 64.7% increase in the target price, at a time when the stock remains trading inside its 52-week range of DKK175 to DKK293.
The brokerage cited three primary drivers for the stronger stance: a hearing-aid market that looks healthier than previously guided, initial commercial traction for Demant’s Oticon Zeal device and an improved earnings-risk profile that the analysts see as more likely to lead to upgrades to consensus estimates rather than the downgrades that had been contemplated earlier.
BofA’s analysis points to market expansion of roughly 5% in the first quarter of 2026, outpacing the 2-4% full-year growth guidance that most manufacturers had been signaling. The bank reached this conclusion after reviewing reported unit results from the sector’s largest participants.
The four biggest global hearing-aid makers - Demant, GN, Sonova and WS Audiology - together account for more than 90% of the market. Their first-quarter unit growth results were reported at 9%, 9%, 11% and -6%, respectively. From those figures, BofA derives an estimated overall market growth rate of 5.4% for the quarter. On a three-year rolling basis, the brokerage calculates market growth at 4.6%.
In the analysts’ view, a conservative full-year market assumption of 4% would imply a dramatic contraction for private competitor Starkey - an 18% decline in units - which BofA described as unlikely in the context of the other manufacturers’ reported growth.
Regarding product-level dynamics, BofA’s work suggests consensus projections for Demant’s Oticon Zeal equate to roughly 70,000 units sold in 2026. That represents under 2% of the product’s serviceable addressable market, which the brokerage places at 3.81 million units.
On the company-specific growth outlook, BofA models 7.5% organic growth for Demant’s Hearing Aids segment in 2026, slightly above the consensus estimate of 7.2%. The bank also quantified a potential contribution from a U.S. channel: it estimates Zeal could bring in DKK76 million of revenue from the U.S. Veterans Affairs channel in 2026, assuming a 2% volume share and an average selling price of $600.
Reflecting these developments and the lower assessed earnings risk, BofA raised its 2026 earnings-per-share estimate for Demant to DKK13.13 from DKK12.14, an 8.1% increase, and lifted its 2027 EPS forecast to DKK14.87 from DKK13.58, up 9.5%. The brokerage also increased its 2026 revenue projection to DKK25.93 billion from DKK25.29 billion and lowered its weighted average cost of capital assumption to 7.9% from 8.7%.
BofA’s DKK280 price objective is the average of three valuation approaches. Using an EV/EBITDA multiple of 13.5 times produces an implied share price of DKK303; a discounted cash flow model with a 7.9% WACC implies DKK276; and a price-to-earnings multiple of 18.5 times implies DKK259 per share, according to the analysts.
The report also identifies competitive risk from Costco, though the brokerage judged the potential impact as manageable rather than transformative. In a sensitivity scenario, BofA estimates Demant could lose about DKK140 million in Hearing Aids revenue in 2027 if Sonova captured 20% of Costco’s business and one-third of that shift in volume were taken from Demant. That hypothetical loss would equate to roughly a 0.5% reduction in group revenue under the stated assumptions.
On a balance-sheet and size basis, BofA’s note lists Demant’s market capitalization at DKK53.45 billion with 211.8 million shares outstanding, and net debt of DKK19.66 billion as of December 2025, based on the brokerage’s estimates.
Sector and market context
- Hearing-aid manufacturers and medical-device suppliers are the primary sectors affected by these developments.
- Analyst revisions and valuation changes also have implications for investor appetite in equipment-focused components of the healthcare and consumer-medical equipment sectors.
Conclusion
BofA’s upgrade and higher target reflect a reassessment of demand conditions and product-level progress for Demant. The brokerage now anticipates stronger organic growth, modest upside from the Oticon Zeal rollout - including a measurable U.S. veterans channel contribution - and a reduction in perceived earnings risk that supports valuation upside. The note nevertheless acknowledges competitive pressures, notably from channels such as Costco, which could create localized revenue displacement under certain scenarios.