On Tuesday, an analyst at Deutsche Bank (ETR:DBKGn) updated the price target for Grifols SA (NASDAQ:GRFS) (GRF:SM) (OTC: GIFOF), raising it to €10.00 from the previous €9.00, while the Hold rating on the stock was maintained. The adjustment followed the company's third-quarter results, which were reported on November 7, 2024.
The analyst noted that the changes to the model were slight and that the overall outlook for Grifols (BME:GRLS) remained the same. Grifols' shares are trading at a discount compared to its peers, although the discount is smaller when considering the EV/EBITDA ratio due to the company's debt burden.
This valuation is seen as largely reflecting the various risks associated with the company, including its recent history with the Spanish National Securities Market Commission (CNMV), operational challenges such as those related to the FcRn program, and financial concerns stemming from leverage and a lack of free cash flow generation.
Despite these challenges, the current focus among investors is on the pending transaction with Brookfield. Details and progress on this deal are highly anticipated, but as of now, further information remains forthcoming.
The new price target represents a 10% increase from the previous target, which the analyst attributes to the modest positive revisions based on the latest quarterly update. The Hold rating suggests that Deutsche Bank advises investors to maintain their current position in Grifols shares without making additional purchases or sales at this time.
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