(CercleFinance.com) – The stock fell nearly -8% as UBS reaffirmed its ‘sell’ recommendation on Sartorius Stedim Biotech despite a price target raised from 297 to 355 euros. This new target still leaves a downside potential of 10% for the title of the supplier of equipment and services for the pharmaceutical industry.
“The outlook through 2025 looks reasonable and implies an underlying growth rate that does not support valuation and leaves a four-fold PEG ratio, which still looks unattractive,” the brokerage explained in its rating summary.
Note that the group also announced this morning the conclusion of the acquisition of the chromatography division of Novasep, a transaction which leads it to adjust its sales forecast for 2022. At constant exchange rates, Sartorius Stedim Biotech anticipates revenue growth between 15 and 19% (previously 14-18%) while the company’s current EBITDA margin is still expected to be over 35% this year.
The acquired business generated revenue of approximately €40 million in 2020 with a double-digit profit margin.
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