Sartorius forecasts support positive outlook Despite ongoing market uncertainties, analysts at US bank JPMorgan expect that the preferential shares of laboratory supplier Sartorius will receive a boost in the coming years due to a strong outlook for 2024 and positive new medium-term goals. According to JPMorgan analyst Richard Vosser, whose latest study was published on Tuesday, the presentation of the results for the fourth quarter of 2023, which Sartorius will present together with its French subsidiary Sartorius Stedim Biotech on January 26, could provide a positive surprise. For this reason, Vosser has awarded the stock the status of "Positive Catalyst Watch" and maintained the rating as "Overweight". The price target remains at 315 euros.
Market expects lower growth in the bioprocessing market According to Vosser, the market is expecting comparatively low growth in the Bioprocess Solutions (BPS) segment, where Sartorius consolidates its portfolio for the production of biopharmaceuticals, for 2024. However, the analyst anticipates a mid to high single-digit revenue growth and also expects an improved order situation for BPS in the fourth quarter of 2023. Furthermore, he is confident that the new medium-term targets for 2028 will offer upward potential for the forecasts of subsidiary Stedim and will largely confirm the expectations for the Sartorius Group.
Vosser explains that this is likely to strengthen the recent upward trend of the stock. Solid fourth quarter expected. For the fourth quarter itself, Vosser also expects solid figures. According to his estimates, the operating result (EBITDA) of Sartorius Group and Stedim is expected to be slightly above the average forecasts of Bloomberg analysts. For the year 2024, Vosser expects revenue growth "at constant exchange rates in the mid-single-digit percentage range" and an adjusted EBITDA margin of slightly over 30 percent.
For the BPS segment, he expects a margin expansion to "slightly above 31 percent". The margin for the LPS segment, which offers laboratory products and services, is expected to be "slightly above 25 percent" according to Vosser. On the other hand, the forecasts for the subsidiary Stedim are slightly more cautious and could be about four percent below Bloomberg's consensus value for revenue and adjusted earnings.
Stock will develop positively in the coming months According to the "Overweight" classification by JPMorgan, the stock of the laboratory equipment supplier will have a better performance than the respective sector in the next six to twelve months. On the first trading day of the year, Sartorius' shares started with a jump of 4.14 percent to 347.00 euros and led the DAX. Later, they rose by another 1.68 percent to 338.80 euros.
