Tandem Diabetes upgraded to Neutral by Citi, citing shift in risk-reward setup

Tandem Diabetes Care upgraded to Neutral from Sell by Citi due to a favorable risk-reward setup following a recent earnings-led selloff. The company's stock price dropped around 20% last week.

In a significant move, Citigroup has upgraded its rating for Tandem Diabetes Care (TNDM) to 'Neutral' from 'Sell', reflecting a shift in the company's risk-reward setup following a recent earnings-led selloff. The price target has been raised to $10.35, indicating a 3.50% increase [1].

The upgrade comes after Tandem Diabetes Care reported strong Q2 2025 earnings, highlighting record sales and growth, particularly in the U.S. market. The company reported $170 million in U.S. sales, up 9% year-over-year, driven by increased pump shipments and expanding market access strategies [2]. This robust performance has led Citigroup to reassess the company's prospects, noting the potential for significant growth through its multichannel market access strategy, including plans to launch pharmacy channel sales for t:slim supplies in Q4.

Tandem Diabetes Care's strong product pipeline, which includes the Mobi platform upgrades and the Steadiset's extended wear 510(k) submission, is expected to enhance product versatility, particularly beneficial for type 2 diabetes users with greater insulin needs [2]. However, Citigroup also acknowledged potential risks associated with the company's expansion into the pharmacy channel and the impact of CMS proposals on its business.

The company's stock price has been volatile, with a significant drop of around 20% last week due to earnings concerns. Despite this, the upgrade suggests that Citigroup sees the current valuation as attractive, given the company's strong fundamentals and growth prospects.

Analysts' consensus is mixed, with an average target price of $22.59 and a consensus recommendation of 'Hold' [3]. The estimated GF Value for Tandem Diabetes Care Inc. in one year is $42.98, suggesting a potential upside of 324.91% from the current price of $10.115 [1].

As the company navigates these challenges, investors will be closely watching Tandem Diabetes Care's ability to execute its growth strategies and manage potential risks. The upgrade by Citigroup provides a positive signal for investors, indicating a potential turnaround in the stock's performance.

References:
[1] https://www.gurufocus.com/news/3055021/citigroup-upgrades-tandem-diabetes-care-tndm-rating-to-neutral-tndm-stock-news
[2] https://www.ainvest.com/news/citi-upgrades-tandem-diabetes-care-neutral-raises-pt-10-35-2508/
[3] https://finance.yahoo.com/news/tandem-diabetes-care-inc-tndm-215002864.html