Evotec downgraded to Equal Weight from Overweight at Morgan Stanley

Morgan Stanley downgraded Evotec to Equal Weight from Overweight with a price target of $6, down from $15. The analyst cites the company’s “ongoing strategy reset” for the downgrade. The firm expects Evotec’s Q2 strategic update to focus on the turnaround and the return to profitable growth. It sees upside potential if Evotec delivers on rebased expectations, but says visibility remains low. Conviction in the story needs to be rebuilt before the market will reward the business with a higher multiple, the analyst tells investors in a research note.