Laboratory outfitter collects prognosis
Sartorius scares investors – share collapses
06/19/2023, 12:05 p.m
In view of persistently weak demand, laboratory equipment supplier Sartorius cuts its annual targets. Analysts are shocked at the magnitude. Investors are extremely nervous. A competitor also feels the uncertainty.
The laboratory equipment supplier Sartorius has alienated investors with a profit warning. The shares slumped by 15 percent to 302 euros – the lowest value in almost three years and the highest price loss in eight months. In the wake of Sartorius, Merck shares also fell by more than five percent – the pharmaceutical and technology group also offers products for pharmaceutical research and drug production.
The analysts at Berenberg Bank explained that the reduction in Sartorius’ targets that they had already expected was greater than feared. The extent of the profit warning is a cause for concern, Morgan Stanley said. “The new outlook is below the market’s most pessimistic expectations.”
Sartorius lowered its sales and profit forecasts significantly on Friday evening and now expects sales to fall by around 10 to 15 percent for the current year. Up to now, Sartorius had assumed a low single-digit growth rate. At around 30 percent, the operating return on sales (EBITDA margin) will also not match the previous year’s level of 33.8 percent, as expected. The company spoke of “persistent general weak demand dynamics”. After the corona pandemic, the warehouses of customers from the biopharmaceutical industry were fuller than expected, so dismantling them took longer.
The Goettingen-based company stuck to its medium-term goals up to 2025. According to Morgan Stanley analysts, however, achieving these goals has become more difficult and uncertain. Merck had already lowered its targets for the laboratory division to organic growth of plus two percent to minus two percent in May, after the company had originally assumed slight to moderate organic growth. The extent of Sartorius’ forecast cut indicates that the Merck division is more likely to be at the lower end of the forecast range or that a further reduction in targets may be pending, Morgan Stanley said.