Fresenius Medical Care: Hold Rating Amid Ambitious Targets and Execution Risks

Bank of America Securities analyst Julien Ouaddour reiterated a Hold rating on Fresenius Medical Care AG & Co. KGaA (0H9X – Research Report) today and set a price target of €56.00.

Julien Ouaddour’s rating is based on the recent updates from Fresenius Medical Care’s Capital Markets Day, where the company outlined ambitious medium-term targets, including a mid-teen EBIT margin by 2030 and a significant share buyback plan. Despite these positive updates, the market had largely anticipated these announcements, which were already reflected in the stock’s price, leading to a ‘sell the news’ reaction. The stock’s recent pullback and the lack of clear mid-term revenue guidance contribute to the Hold rating.
Another factor influencing the Hold rating is the ambitious rollout plan for the 5008X machine, which, while promising in terms of clinical efficiency and patient benefits, presents execution risks. The absence of revenue guidance amid structural challenges, such as the impact of SGLTs/GLPs, adds uncertainty. The valuation adjustments, including a higher WACC to account for execution risks and a lower P/E multiple due to sector de-rating, further support the Hold recommendation.

In another report released today, Bernstein also maintained a Hold rating on the stock with a €54.50 price target.