TD Cowen analyst Daniel Brennan downgraded the rating on Avantor (AVTR – Research Report) to a Hold today, setting a price target of $15.50.
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Daniel Brennan has given his Hold rating due to a combination of factors impacting Avantor’s performance and outlook. A significant concern is the underperformance in the Bioprocess segment, which is a crucial growth driver for the company. The segment’s growth fell short of expectations, and the guidance was lowered, leading to reduced confidence in this area of the business. Additionally, Avantor’s core Lab consumable business is facing increased competitive pressure, resulting in potential market share losses and pricing challenges, further affecting the company’s outlook.
Despite these challenges, there is still some potential for upside, as the stock is currently trading at a historically low valuation. However, the anticipated growth and margin improvements are not sufficient to support a more optimistic rating, especially given the persistent issues and the company’s aggressive EPS guidance for 2025. Consequently, Brennan believes that a Hold rating is appropriate, reflecting both the potential for limited gains and the ongoing uncertainties in Avantor’s key business areas.
According to TipRanks, Brennan is a 4-star analyst with an average return of 6.3% and a 38.02% success rate. Brennan covers the Healthcare sector, focusing on stocks such as Illumina, Danaher, and Thermo Fisher.
In another report released today, Morgan Stanley also downgraded the stock to a Hold with a $15.00 price target.