Masimo stock jumped Wednesday after Chief Executive Joe Kiani resigned, while the company's other executives stayed on board.
Kiani's resignation follows a proxy battle between Masimo and Politan Capital Management. The battle saw Kiani ousted as chair. Kiani cautioned before the vote that he would resign if he lost the chair seat, according to media reports.
The board named Michelle Brennan as interim CEO. Brennan is a former Johnson & Johnson executive and one of the people Politan named to the board last year. The activist investor owns about 9% of Masimo stock, according to a Sept. 5 news release.
"Importantly, it appears that other executives have elected to stay at Masimo and the press release quotes both Chief Financial Officer Micah Young and Chief Commercial Officer Bilal Muhsin (who we note had previously said he would resign if Politan won control of the board)," Needham analyst Mike Matson said in a report.
Masimo stock popped 6% to close at 133.77. Shares are working on a lengthy consolidation with a buy point at 153.93, according to chart analysis from MarketSurge.
Masimo Stock: Outlook Retained
Notably, Masimo also reiterated its outlook for the third quarter. The company has projected adjusted earnings of 81 cents to 86 cents per share and $495 million to $515 million in sales. Masimo stock analysts currently model 84 cents and $505 million, respectively, Matson said.
He reiterated his hold rating on Masimo stock.
"We think investors are likely to be encouraged that management turnover appears limited to just Joe Kiani," he said. "But we remain wary that there could be surprises in store."
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