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Investing.com - BofA Securities downgraded Fresenius Medical Care AG & Co KGaA (NYSE:FMS) from Neutral to Underperform and lowered its price target to EUR38.00 from EUR50.00, citing concerns about patient volume recovery and margin risks.
The downgrade reflects limited visibility on when patient volumes will recover and potential margin pressures in 2025-26, including expiring Affordable Care Act subsidies and a mix shift to value-based care. BofA has reduced its adjusted EBIT estimates by 6-8% for fiscal years 2025-2026, placing its forecast 3-5% below consensus.
BofA acknowledged upcoming potential catalysts for Fresenius Medical Care, including a share buyback program and HV HDF rollout, but suggested these factors are already well appreciated by the market and unlikely to drive meaningful near-term upside.
The firm noted that Fresenius currently trades at 6.3x next-twelve-months EV/EBITDA compared to the sector average of 11.9x, and 11.0x NTM P/E versus the sector’s 18.8x. BofA attributes this discount to Fresenius’s below-sector returns, margins, and growth prospects.
The new price target of EUR38.00 (equivalent to $22 for the ADR) represents a significant reduction from the previous target of EUR50.00 ($29) and is based on an average of multiple valuation methods, including EV/EBITDA and P/E multiples at 45-50% discounts to the sector.
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