In a report released today, Brendan Smith from TD Cowen maintained a Buy rating on Evotec AG, with a price target of $7.00.
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Brendan Smith has given his Buy rating due to a combination of factors that highlight both challenges and opportunities for Evotec AG. The company has adjusted its revenue guidance for FY25, reflecting ongoing difficulties in its Shared R&D segment due to broader economic pressures. However, Evotec’s strategic shift towards higher-margin technology licenses and the completion of the Priority Reset initiative are expected to enhance profitability, potentially offsetting some of the revenue shortfalls.
Smith acknowledges that while the near-term outlook may be impacted by these headwinds, the company’s focus on reducing capital expenditures and increasing revenue from higher-margin segments could drive significant growth in the medium to long term. The anticipated improvements in adjusted EBITDA and the strategic realignment towards more profitable ventures underpin the Buy rating, as these efforts are likely to strengthen Evotec’s financial performance moving forward.