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On Tuesday, analysts at KeyBanc reiterated an Overweight rating and maintained a $30.00 price target for Avantor Inc . (NYSE: NYSE:AVTR). The analysts highlighted several potential catalysts that could drive the stock price higher, despite recent challenges that have pressured its valuation. According to InvestingPro data, the stock currently trades at a P/E ratio of 12.3x, suggesting potential upside based on its Fair Value analysis.
Avantor’s stock is currently trading at a five-year low of 10.0 times its FY26 EV/EBITDA, following difficulties such as reduced NIH funding and academic uncertainties affecting its Laboratory Solutions segment. The stock has also been impacted by recent sell-side downgrades and leadership changes after the CEO announced his departure. KeyBanc analysts, however, view this as a buying opportunity, expecting the stock to re-rate closer to its five-year average of 15.1 times EV/EBITDA. InvestingPro analysis shows the company maintains a "GOOD" overall financial health score, with particularly strong marks in profitability and relative value metrics.
Key catalysts identified include the potential announcement of a new CEO, possibly with bioprocessing experience, and an expected acceleration in Avantor’s Bioscience Production segment with the end of destocking. Analysts also pointed to potential mergers and acquisitions as a result of an improved balance sheet and possible new leadership. The company’s strong financial position is evidenced by its healthy current ratio of 1.12 and manageable debt-to-equity ratio of 0.67, as reported by InvestingPro.
The analysts noted limited downside risk to revenue in the near term, citing conservative guidance with organic growth around +/-1%. They also referenced positive results from Merck (NSE:PROR) KGaA, Avantor’s main competitor in Process Ingredients & Excipients, which reported an 11% year-over-year increase in Process Solutions sales. Avantor’s exposure to U.S. academic and government spending is low at around 6%, and its exposure to China is minimal at 1-2%.
Overall, KeyBanc remains optimistic about Avantor’s prospects, emphasizing the potential for upside given the current valuation and upcoming catalysts.
In other recent news, Avantor Inc. has seen several shifts in analyst ratings and price targets. Raymond (NSE:RYMD) James reaffirmed its Outperform rating for Avantor, maintaining a price target of $16.00, highlighting the undervaluation of the company’s bioprocessing and silicones segments, which constitute about 30% of its business. In contrast, Goldman Sachs downgraded Avantor from ’Buy’ to ’Neutral’ and slashed its price target to $14.00, citing challenges in the Laboratory Solutions segment, which makes up 65% of the company’s operations. Bernstein also reduced its price target for Avantor to $15.00 from $18.00, following disappointing first-quarter results and increased competition. Despite this, Bernstein noted some positive developments, such as cost-saving measures and new leadership roles, which could improve Avantor’s strategy. RBC Capital lowered its price target to $20.00 but maintained an Outperform rating, expressing confidence in Avantor’s long-term potential despite immediate pressures. Additionally, Avantor has implemented a new executive severance policy, indicating strategic adjustments within the company. These recent developments reflect a mixed outlook for Avantor, with analysts differing in their assessments of the company’s current challenges and future prospects.
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