Citi maintains Buy on Stevanato Group, reiterates $28 price target

On Thursday, Citi research firm maintained a Buy rating on Stevanato Group S.p.A. (NYSE: STVN), a $5.2 billion market cap manufacturer of drug containment, delivery, and diagnostic solutions, with a steady price target of $28.00. Despite the stock’s challenging performance, down 42% over the past year according to InvestingPro data, the company reported fourth-quarter 2024 earnings that surpassed market expectations.

The company’s revenue reached €330.6 million, exceeding the consensus estimate of €322 million. Earnings per share (EPS) came in at €0.19, which was also above the consensus of €0.18. The Biopharmaceuticals Division (BDS) showed an 8% year-over-year growth at constant currency, with revenue of €279.4 million, surpassing the consensus forecast of €272 million. This growth was primarily driven by the High-Value Solutions (HVS) segment, which contributed approximately 40% of the total company revenue. InvestingPro data shows the company maintains a strong financial health score of 2.64, rated as "GOOD," with analyst targets ranging from $21 to $37.

For the fiscal year 2025, Stevanato Group has provided revenue guidance in the range of €1.16 billion to €1.19 billion, which encompasses the consensus estimate of €1.18 billion. The forecast for EBITDA is between €293 million and €306.3 million, with margins around 25.4% at the midpoint, compared to the consensus of €295 million. The company’s EPS guidance of €0.51 to €0.55 is in line with the consensus of €0.54.

Stevanato Group’s guidance anticipates a stronger performance in the second half of 2025 compared to the first half, with HVS expected to account for about 39-40% of the 2025 revenues. The BDS is projected to grow at a mid-single to high-single digit rate, while the Engineering segment is estimated to remain roughly flat or experience a slight increase. Additionally, the company expects gross margins (GMs) to expand by 100-140 basis points from the fiscal year 2024’s 27.4% to approximately 28.6% at the midpoint.

Citi’s analysis of the company’s outlook indicates a broadly in-line guidance. The firm’s focus is now on the expected timeline for the improvement in vial de-stocking, progress in the Engineering segment, and management’s perspective on potential changes in the Health and Human Services (HHS) policies and tariffs. InvestingPro analysis reveals additional insights about STVN’s valuation multiples and growth prospects, with 6 more exclusive ProTips available to subscribers. The comprehensive Pro Research Report offers detailed analysis of the company’s performance metrics and future potential.

In other recent news, Gerresheimer has reported robust demand for its production capabilities in the GLP-1 market, with sales expected to exceed €100 million for fiscal year 2024. The company’s current operations are not reliant on Novo Nordisk (NYSE:NVO)’s CagriSema, which may impact market dynamics post-2027. KeyBanc’s analysis predicts that the GLP-1 market will reach $116 billion by 2030, with a compound annual growth rate of approximately 25% until 2028, excluding CagriSema contributions. Meanwhile, Stevanato Group is strategically investing in facilities to meet the anticipated rise in GLP-1 demand, with significant developments at its Fishers, Indiana site. Wolfe Research has initiated coverage on Stevanato Group with an Outperform rating and a price target of $28.00, citing potential for double-digit revenue growth as the company overcomes industry challenges. The firm projects Stevanato’s revenue growth to reach high single-digit levels by 2025, with improved EBITDA margins in the mid-20s percentage range. Wolfe Research also expects Stevanato’s free cash flow to improve as capital expenditures stabilize. These developments highlight the strategic positioning and growth prospects of both Gerresheimer and Stevanato Group in the evolving biopharmaceutical landscape.

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