New York, June 5, 2026, 04:15 (EDT)
- Medline closed at $34.45 Thursday, flat on the day after dropping earlier in the week when an FDA move sparked a selloff.
- The FDA’s latest warning letter pointed to quality problems at Medline’s Waukegan, Illinois, plant that makes drugs.
- Baird cut its price target to $45 from $57 and kept an Outperform rating.
Medline Inc. MDLN got hit with another warning letter from U.S. regulators Friday, the second warning in as many months. The back-to-back warnings put more heat on Medline’s quality control, just weeks after its IPO. The stock ended Thursday at $34.45, flat. Latest quote showed a 0.06% dip from the close.
Medline’s timing is under a microscope. The firm listed on Nasdaq in December with 2025’s biggest IPO. Now, investors are watching to see if Medline’s hospital supply operation is large enough to weather regulatory noise, tariffs, and post-IPO selling. The stock is trading above the $29 IPO price but still distant from its $41 first-day close.
Medline’s Waukegan, Illinois drug facility was cited by the FDA for serious CGMP lapses, according to a warning letter dated May 28 and made public this week. FDA inspectors found ongoing microbial contamination, inadequate investigations, and cleaning failures at the site.
The FDA said Medline detected Bacillus cereus in finished drug samples nine times between June 2023 and August 2025, and found the bacteria in at least five manufacturing area samples since January 2025. According to the agency, Medline’s poor investigations and lack of follow-up may be a patient safety risk.
Medline said Wednesday it has made “significant improvements” in production and plant operations at Waukegan, Reuters reported. The company made the comments after the FDA issued another warning, the latest following an April FDA notice about problems with syringes for heart procedures. Medline added it is working with the FDA at Waukegan and also at other drug-manufacturing sites. Reuters
Wall Street reacted. Eric Coldwell at Baird dropped his price target for the stock to $45, down from $57, but kept his Outperform rating. Coldwell cited the FDA warning letter and broader macro uncertainty as reasons for the move.
Coldwell described the new warning as “not a welcomed series of events” and said it “doesn’t look great.” Still, he said he doesn’t see a major earnings hit and expects Medline to handle it. TipRanks
Medline Q1 sales rose 10.7% to $7.4 billion. Net income fell 25.8% to $239 million, while adjusted EBITDA dropped 10.6% to $776 million. The company bumped its 2026 organic sales growth target to 8.5%-9.5%.
Medline’s valuation is being measured against its competitive set. In its latest SEC filing, the company put Baxter International, Becton Dickinson and Owens & Minor into its peer group for pay comparisons. So investors are stacking Medline up next to these bigger healthcare-products and distribution names.
The FDA process could cost more or take longer than analysts expect. The agency is asking for extra risk reviews, detailed timelines, and stronger contamination controls. It told the plant that without fixes, it might face seizure, injunctions, lost export certificates, or delayed approvals.
Medline is stuck between a solid medical-supplies business posting double-digit sales gains and trouble from regulators. The company’s IPO is still new. It’s already racked up two FDA warnings in less than half a year on the market. Friday, investors will have to judge if those warnings are just a blip or something that will knock down Medline’s valuation.
