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On Wednesday, Barclays (LON:BARC) analyst Charles Pitman upgraded Sartorius AG (ETR:SATG) (SRT3:GR) (OTC: SARTF) stock rating from Equalweight to Overweight and increased the price target from EUR260.00 to EUR320.00. The upgrade reflects a positive outlook on the company’s future, anticipating a return of reliable customer order demand in the post-COVID "normal" starting from the first half of 2025.
Pitman’s analysis suggests that this renewed demand is expected to drive positive earnings estimates momentum, improve investor goodwill, and attract long-only interest back to the shares. The anticipated outcome is a re-appreciation of Sartorius AG’s shares, which are currently trading at a discount compared to the broader market.
In explaining the rationale behind the upgrade and the new price target, Pitman pointed out that the valuation of Sartorius AG is based on a 24x EV/FY26E EBITDA and a 20x EV/FY27E EBITDA. These multiples are slightly below the long-term average for the company, which further supports the potential for stock revaluation.
Additionally, Pitman highlighted that Sartorius Stedim (EPA:STDM), a subsidiary of Sartorius AG, is valued on a higher multiple due to its higher growth and exposure to longer duration commercial contracts. The analysis sets a 26x EV/FY26E EBITDA and a 21x EV/FY27E EBITDA for Sartorius Stedim, which also remains below the implied sector multiples.
The report by Barclays indicates that the price target adjustments for both Sartorius AG and Sartorius Stedim take into account a significant discount compared to the sector-implied multiples, suggesting room for growth in the stock’s valuation. This provides a basis for the upgraded rating and increased confidence in the stock’s performance in the coming years.
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