Goldman Sachs cuts Avantor stock rating, slashes price target

Published 29/04/2025, 09:56
Goldman Sachs cuts Avantor stock rating, slashes price target

On Tuesday, Goldman Sachs adjusted its stance on Avantor Inc . (NYSE:AVTR), downgrading the company’s stock from ’Buy’ to ’Neutral’. The firm’s analysts also significantly reduced the price target to $14.00, a sharp decline from the previous figure of $23.00. The stock, currently trading near its 52-week low of $12.20, has seen a steep 41% decline year-to-date, with a market capitalization of $8.5 billion.According to InvestingPro analysis, Avantor appears undervalued based on its Fair Value estimate, with 14 analysts recently revising their earnings expectations downward.

The downgrade by Goldman Sachs’ analyst Matthew Sykes was prompted by concerns over Avantor’s Laboratory Solutions business. Despite the company’s aggressive cost-saving initiatives and a restructuring of its segments, the Laboratory Solutions division is expected to hinder overall growth due to increasing competitive pressures and ongoing macroeconomic challenges.

Avantor’s Laboratory Solutions segment, which accounts for approximately 65% of the company’s business, is not anticipated to achieve its Long Range Plan (LRP) growth algorithm of 4-6% in organic growth in the foreseeable future. The analyst noted that while there is confidence in the company’s ability to improve margins, the timeline for the Lab segment’s growth acceleration is uncertain and likely to be protracted.

The reassessment from Goldman Sachs suggests a cautious outlook for Avantor, as the company navigates a challenging period for its largest business unit. The firm’s analysts have tempered their expectations for the company’s performance, reflecting a more reserved view of Avantor’s near to medium-term prospects.

Investors and market watchers will be keeping a close eye on Avantor’s forthcoming strategies to address these concerns and stimulate growth in its Laboratory Solutions business. The company’s ability to adapt to the intense market competition and macroeconomic headwinds will be critical for its future success and investor confidence.

In other recent news, Avantor Inc. has faced several adjustments from analysts following its first-quarter earnings report, which revealed challenges in key business segments. Bernstein has lowered its price target for Avantor to $15, citing increased competition and aggressive pricing strategies by peers like Thermo Fisher Scientific (NYSE:TMO). Meanwhile, RBC Capital has reduced its price target to $20, maintaining an Outperform rating while expressing optimism about Avantor’s long-term potential despite current challenges. TD Cowen has downgraded Avantor’s stock rating from Buy to Hold, with a new price target of $15.50, reflecting concerns over growth prospects and market share losses. Morgan Stanley (NYSE:MS) has also downgraded Avantor from Overweight to Equalweight, cutting the price target to $15 due to estimate downside risks and competitive pressures. Additionally, Stifel has reduced its price target to $14 and downgraded the stock to Hold, highlighting issues in the bioprocess sector and tariff impacts. These developments indicate a cautious sentiment among analysts as Avantor navigates a competitive landscape and internal challenges.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.

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