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On Monday, RBC Capital Markets adjusted its outlook on Avantor Inc . (NYSE:AVTR) by reducing the price target from the previous $33.00 to $31.00, while continuing to recommend the stock as Outperform. The decision follows Avantor’s recent disclosure of its fourth-quarter results and forecasts for the fiscal year 2025. According to InvestingPro data, the stock has experienced a significant 12.39% decline in the past week, with current analyst targets ranging from $22 to $31. The stock appears undervalued based on InvestingPro’s Fair Value analysis.
Conor McNamara of RBC Capital noted that Avantor’s performance surpassed expectations, as evidenced by a substantial earnings per share (EPS) beat and double-digit EPS growth projected in their guidance. The company reported diluted EPS of $1.04 over the last twelve months, with analysts forecasting $1.07 for fiscal year 2025. However, the market’s reaction was less enthusiastic, reflecting investors’ anticipation for a full rebound in the Life Science Tools end-markets. InvestingPro analysis indicates the stock is trading at a low P/E ratio relative to near-term earnings growth, with eight additional ProTips available to subscribers.
Despite the lower growth due to foreign exchange and organic revenue estimates, McNamara remains confident in Avantor’s execution and maintains the Outperform rating. The analyst addressed three critical inquiries in light of the Q4 outcomes: whether the results alter the firm’s thesis on Avantor (to which the answer was "No"), if the market’s negative response to the stock was justified ("No"), and the implications for the sector ("It’s a sell-the-news tape").
Avantor, a provider of products and services to the life science and advanced technology industries, has been navigating a challenging economic landscape. The adjusted price target reflects the impact of currency fluctuations and organic growth estimates on the company’s revenue.
The analyst’s comments suggest that while Avantor’s solid earnings performance indicates strong internal operations, the broader market is looking for signals of a sector-wide recovery. As Avantor continues to execute its strategy, RBC Capital Markets’ revised price target offers a new benchmark for investors monitoring the company’s progress.
In other recent news, Avantor Inc. has been the subject of several analyst reports. Bernstein reduced its price target for Avantor from $24.50 to $22, while maintaining a Market Perform rating. This revision comes after a weaker-than-expected performance in Avantor’s Laboratory Solutions business, which constitutes two-thirds of the company’s operations. Despite the underperformance, Avantor demonstrated significant operational expense control and strong cash flow conversion.
Similarly, Stifel analysts reduced their price target on Avantor shares to $26 from $28, but maintained a Buy rating. This adjustment followed management’s ambitious 2025 EBITDA goals. Stifel highlighted Avantor’s attractive valuation, minimal exposure to the Chinese market, and a low mix of instrument sales as key strengths.
In its Q4 2024 report, Avantor beat earnings expectations but fell short on revenue. The company reported adjusted earnings per share of $0.27 and revenue of $1.69 billion, a 2% decrease year-over-year. Despite the revenue miss, Avantor’s bioprocessing platform grew high-single-digits, with expectations of continued strength. These are among the recent developments concerning Avantor.
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