Dental Update Survey Says: Filling the Dental Demand Cavity—Recovery Continues in 1Q; NTM Outlook Incrementally Positive Life Science Tools and Diagnostics | Channel Check 1Q Dental Practice Volume, Revenue Improves; Increasingly Optimistic on Recovery Outlook : According to our proprietary survey of 75 US dental practitioners, over one-third (37%) of practices experienced >5% declines in revenue in 1Q, vastly better than the 4Q experience (62%), suggesting demand is recovering , likely driven by broader vaccine distribution and greater patient willingness to see practitioners . In 1Q, practice reve nue is estimated to have fallen 9.6% y/y, a nice sequential improvement relative to 4Q (-20.2%), albeit on an admittedly easier comp ( -2.8% in 1Q20) with bridges and implants ( -9.2%) still representing the most meaningful headwind , followed by cosmetic ( -9.1%), orthodontics ( - 8.1%), and preventative ( -8.0%) . Respondents remain seemingly more optimistic going forward, with expectations of a healthy recovery, where practitioners are expecting a 23.4% rise in 2Q revenue , albeit acknowledging that 2Q20 was by far the weakest dental demand period in 2020. Moreover, p ractitioners expect a 14.1% rise in revenue over the NTM, also likely reflecting the expectation of vaccine adoption , easy comps, as well as some potential medium -term increase in acute c ases following visit deferrals. All in, the pandemic has driven a meaningful deterioration in demand, but we are encouraged by the latest signs of recovery back to pre -COVID baseline levels going forward , and we are boosting our TPs for NVST to $49 (from $ 46), ALGN to $693 (from $630 ), XRAY to $71 (from $66 ), HSIC to $75 (from $74 ), and PDCO to $41 (from $40 ) on greater conviction in growth prospects across the industry based on our survey. Clear Aligners – Demand Rebounds; Paradigm Shift Increasing ly Evident: The NTM clear aligner outlook improved significantly , with respondents who currently ut ilize clear aligners expecting robust +10.1 % growth over the NTM (vs. -2.1% in 4Q, -1.4% in 1Q20 ). While several practitioners indicated they were seeing a higher relative level of interest in clear aligners throughout the pandemic, we view the most recent commentary as incrementally positive on the paradigm shift that is underway, driven by continued focus on aesthetics and consumer -oriented advertising, alo ng with pandemic -related benefits where aligner treatment requires fewer office visits, less practitioner interaction, and lower risk of disruption, dynamics that could potentially accelerate the adoption of clear aligners LT. Align Technology's (ALGN, OP) Invisalign rem ains the obvious market leader (64 % of our cohort, 8 7% of clear aligner users). However, we acknowledge traction for Envista ’s (NVST, OP) Spark and Dentsply Sirona’s (XRAY, OP) SureSmile is building , with 17% (of Orthos that use clear aligne rs) using Spark (vs. 12% in 4Q) and 10 % (of GPs that use clear aligners) using SureSmile (vs. 3% in 4Q). Separately, some practitioners (7% in 1Q21 vs. 10% TTM average) continue to express their willingness to work with SmileDirectClub (SDC, OP) , with seve ral others remaining undecided at this juncture due to a lack of information around the model and pricing, differing from our initial theory that practitioners would be broadly unwilling to work with the DTC provider. Meanwhile, practitioners unsurprisingl y expressed disappointment with XRAY’s recent acquisition of Byte, a DTC competitor, and we await better insight into how these perceptions may impact pur chasing behavior. Our Clear Aligner Primer: No Need to Brace Yourself . 21 April 2021 Equity Research Americas | United States DISCLOSURE APPENDIX AT THE BACK OF THIS REPORT CONTAINS IMPORTANT DISCLOSURES, ANALYST CERTIFICATIONS, LEGAL ENTITY DISCLOSURE AND THE STATUS OF NON -US ANALYSTS. US Disclosure: Credi