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HSBC thinks there’s a big market share opportunity for Invisalign maker Align Technology thanks to strong brand awareness despite increasing competition. Analyst Sidharth Sahoo initiated the stock with a buy rating. His $450 price target suggests 22% upside from where shares closed on Tuesday. The stock has already popped more than 74% year to date. “We like Align’s exposure to the higher growth orthodontic case starts market, which it estimates will grow at a 15-20% [compound annual growth rate]. We think Align can continue to grow its market share from c.10% of c.21m annual orthodontic case starts currently,” Sahoo said in a Wednesday note. He continued, “Its strong brand presence along with the significant growth opportunity to gain share amongst teens and expand the market for digital orthodontics, especially among adults, looks attractive to us.” Since dental procedures are mostly out-of-pocket, consumer confidence is a key factor when valuing the sector. The analyst noted that the overall dental market is under-penetrated, with an addressable size of around $20 billion and a solid growth profile. Increasing digital adoption by customers has helped Align during the pandemic, and further applications will help it expand its consumer base. Aging demographics and consumer spending patterns are additional drivers of growth in the mid- to long-term, Sahoo noted. Shares added 2.5% Wednesday before the bell. —CNBC’s Michael Bloom contributed to this report.
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