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On Friday, Jefferies analyst Daniel Rizzo adjusted the price target on AptarGroup (NYSE:ATR) stock, reducing it to $205 from the previous target of $215, while still holding a Buy rating on the shares. The revision followed AptarGroup’s fourth-quarter earnings report, which revealed earnings per share (EPS) of $1.52, outperforming the consensus estimate by $0.26 and Jefferies’ own estimate by $0.24. The company, currently valued at $9.59 billion, trades at a P/E ratio of 28.5x, which InvestingPro analysis indicates is relatively high compared to its near-term earnings growth.
AptarGroup’s forecast for the first quarter EPS stands between $1.11 and $1.19, falling short of the consensus prediction of $1.31. The company anticipates facing a $0.07 quarterly headwind due to unfavorable foreign exchange (F/X) translation effects throughout 2025. An additional headwind is expected from a rise in the tax rate in France, estimated to have an $0.08 quarterly impact. Despite these challenges, InvestingPro data shows the company maintains a GREAT financial health score, with strong cash flows and moderate debt levels.
Rizzo noted that while the destocking in nasal decongestants may impede near-term sales for AptarGroup, the introduction of new pharmaceutical products is projected to drive a 7% growth in EBITDA for the year 2025. Furthermore, the company is expected to achieve an 8% compound annual growth rate (CAGR) through 2027.
AptarGroup’s recent financial performance and the anticipated growth from new pharmaceutical products provide a basis for the Buy rating sustained by Jefferies, despite the lowered price target and near-term market challenges. The company’s strategic outlook, focusing on the launch of new products, seems poised to offset the temporary setbacks forecasted in the near future.
In other recent news, AptarGroup has been catching the attention of prominent financial analysts. Raymond (NSE:RYMD) James, a well-regarded financial services firm, has initiated coverage on AptarGroup, assigning an Outperform rating and setting a price target of $200.00. The firm’s analyst, Matt Roberts, emphasized AptarGroup’s robust financial standing and its expanding footprint in the pharmaceutical sector as key contributors to this positive outlook.
Raymond James regards AptarGroup as a high-quality compounder with significant long-term potential, due to its defensible moats and strong balance sheet. The company’s specialization and growth in pharmaceutical end markets are predicted to propel its development. Despite recognizing near-term risks, such as international exposure and challenges in the Beauty segment, Raymond James expects these issues to largely resolve by the second half of 2025.
The firm also anticipates a shift toward AptarGroup’s high-margin Proprietary Drug Delivery Systems and a surge in higher-value injectables components. This shift, coupled with strict cost control measures and a renewed focus on innovation within its Beauty and Closures divisions, is expected to contribute to both margin and Return on Invested Capital (ROIC) expansion. These recent developments underline the growing recognition of AptarGroup’s transformation towards a larger pharmaceutical component and its potential for accessing higher growth areas.
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