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Investing.com - BofA Securities downgraded Fresenius Medical Care (NYSE:FMS) from Neutral to Underperform on Wednesday, while lowering its price target to $22.00 from $29.00. The stock, which has gained nearly 24% year-to-date and maintains a GOOD financial health score according to InvestingPro, currently trades at $27.40.
The downgrade reflects limited visibility on patient volume recovery and margin risks in 2025-26, including expiring Affordable Care Act subsidies and a mix shift to value-based care.
BofA Securities lowered its adjusted EBIT estimates by 6-8% for fiscal years 2025-2026, positioning its forecast 3-5% below consensus expectations.
The firm noted that while potential catalysts exist, including a share buyback program and HDF rollout, these factors are already well-appreciated by the market and unlikely to drive meaningful near-term upside.
Fresenius Medical Care currently trades at 6.3x next-twelve-months EV/EBITDA and 11.0x next-twelve-months P/E, compared to sector averages of 11.9x and 18.8x respectively, with the discount attributed to below-sector returns, margins, and growth.
In other recent news, Fresenius Medical Care reported its second-quarter 2025 revenue at €4,792 million, aligning closely with the consensus estimates of €4,750 million and marking a 5% growth at constant exchange rates. Despite this revenue growth, the company’s adjusted EBIT was €476 million, about 3% below the consensus expectations of €492 million, influenced by challenges such as a severe flu season and excess mortality. Additionally, Fresenius Medical Care announced the launch of a €600 million share buyback tranche, part of a broader €1 billion program scheduled to continue until August 2027. This move is part of the company’s new capital allocation framework, with the first tranche expected to be completed by April 2026.
Meanwhile, BofA Securities downgraded Fresenius Medical Care from Neutral to Underperform, expressing concerns over patient volume recovery and potential margin pressures. The downgrade included a price target reduction to EUR38.00 from EUR50.00, with BofA also reducing its adjusted EBIT estimates by 6-8% for fiscal years 2025-2026. The analyst firm highlighted limited visibility on patient volume recovery and margin risks, including expiring Affordable Care Act subsidies and a shift towards value-based care. These developments reflect the company’s ongoing challenges and strategic financial maneuvers.
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