Eurofins science. : Weighed down by several downgrades by analysts, Eurofins stalls on the stock market


(BFM Bourse) – Deutsche Bank and Jefferies lowered their opinion on the value for sale and “outperformance”, fearing a complicated year for the group. Eurofins shows the largest drop in the CAC 40.

The diagnosis of analysts on the action Eurofins turns red. The analysis group for pharmaceutical, food and environmental products is moving down sharply on Wednesday, with a decline of 4% to 63.98 euros around 11 a.m. This is the most pronounced decline in the CAC 40, an index that Eurofins joined in September 2021.

The analysis laboratory suffered from several degradations by design offices which lowered their advice on value.

Deutsche Bank has thus lowered its recommendation to “hold” to “sell” on the action, while adjusting its target price to 58 euros against 80 euros previously. For the German bank, the year 2023 promises to be difficult for Eurofins.

Decline in revenue related to Covid-19

The profitability of profits derived from diagnostics in France should be penalized by the reductions in prices imposed by the French State on the entire sector, she warns.

More generally, in its forecasts, the establishment estimates that the group should generate revenues linked to Covid-19 of 150 million euros in 2023 against around 600 million euros in 2022. Other so-called “core business” activities would record organic growth of 6.5%. Despite this increase, the turnover of the company would remain, overall, stable, in the forecasts of Deutsche Bank.

Due to the inflation of its costs estimated at 3.5% by Deutsche Bank, the company’s results would be under pressure in 2023, and earnings per share would thus fall by 15% over one year.

“We believe Eurofins has been a good investment opportunity for most of its history, but a combination of factors means it is now facing a tough time,” the German bank said.

Annual results at the end of February

Besides Deutsche Bank, Jefferies also lowered its advice from “hold” to “underperform”, the equivalent of “sell” at the design office, while reducing its target price to 58 euros from 70 euros. previously.

The investment bank also fears that the diagnostic activity in France will weigh on both the activity and the profitability of the group this year. Jefferies retains a negative impact of between 3% and 4% for the earnings per share of Eurofins.

The establishment also points out that the prospects in pharmaceutical and food tests are “mixed” in the short term.

Eurofins will have the opportunity to provide an update on its annual outlook on February 22, when it publishes its annual results.

Julien Marion – ©2023 BFM Bourse

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