Align slips as brokerage downgrades rating to 'in line' over slowing demand

By Reuters News

** Shares of Align Technology ALGN.O fall 3% to $139.45 premarket

** Brokerage Evercore ISI cuts ALGN's rating to "in line" from "outperform"

** Brokerage says "weakening consumer backdrop", a "sharp deceleration" in September demand indicators, and potential China's VBP headwinds in 2027, makes the brokerage "more cautious on (Align's) earnings outlook"

** VBP (volume-based procurement) is China's national bulk-buy program

** Evercore adds the dental market "has meaningfully weakened in 3Q", pointing to weaker consumer confidence and expectations

** Weaker consumer conditions may be starting to affect Invisalign demand, saying the September deterioration "raises the risk that weakening consumer conditions are beginning to show up in Invisalign demand" - Evercore ISI

** Invisalign is Align's main business, generating about $3.2 billion of the company's $4.0 billion revenue in 2025

** Brokerage says Align's signs of an internal turnaround are "beginning to take shape," but a weaker consumer backdrop and potential VBP headwinds make the path "more difficult"

** As of last close, stock down ~8% YTD

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