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RADNOR, Pa. - Avantor, Inc. (NYSE:AVTR), currently trading at $12.19, issued a statement Monday responding to a letter from activist investor Engine Capital, affirming its commitment to shareholder value creation while announcing Emmanuel Ligner will assume the CEO role on August 18.
The life sciences tools company defended its strategic direction, highlighting recent initiatives including a $400 million cost transformation program, business resegmentation for increased transparency, and debt reduction of nearly $1.5 billion over the past 18 months. According to InvestingPro data, the company maintains a healthy debt-to-equity ratio of 0.67 and appears undervalued based on its Fair Value analysis. Additional insights from InvestingPro’s comprehensive research report reveal strong free cash flow yields and attractive valuation metrics.
"We are acting with urgency to strengthen growth and profitability in both Laboratory Solutions and Bioscience Production," Avantor stated in its response. The company pointed to leadership changes, including a new head of Lab Solutions, as part of its strategic overhaul. Despite recent challenges reflected in its YTD return of -45%, the company maintains a solid gross profit margin of 33.25% and an Altman Z-Score of 4.01, indicating financial stability.
Avantor describes itself as "uniquely positioned for success" due to its broad portfolio, global distribution platform, and established customer relationships across the life sciences industry. The company serves more than 300,000 customer locations in 180 countries.
While the specific demands from Engine Capital were not detailed in Avantor’s statement, the company indicated it "looks forward to an ongoing dialogue with all our shareholders, including Engine Capital."
Goldman Sachs & Co. LLC and Gordon Dyal & Co. are serving as Avantor’s financial advisors, with Paul, Weiss, Rifkind, Wharton & Garrison LLP providing legal counsel.
The statement comes as Ligner, characterized as a "seasoned leader with proven track record of value creation in life sciences," prepares to take over as CEO next week, according to the company’s press release. For deeper insights into Avantor’s financial health and growth prospects, including exclusive ProTips and detailed valuation metrics, visit InvestingPro, where subscribers can access comprehensive analysis and fair value estimates for over 1,400 US stocks.
In other recent news, Avantor Inc. reported its financial results for the second quarter of 2025, showing a mixed performance. The company’s earnings per share (EPS) slightly missed analyst expectations, while its revenue exceeded forecasts. Following this, RBC Capital lowered its price target for Avantor to $17, citing missed earnings and a reduced full-year 2025 guidance, though it maintained an Outperform rating. Stifel also adjusted its price target to $12, expressing concerns over bioprocess growth and maintaining a Hold rating. UBS followed suit, reducing its price target to $13, pointing to market headwinds and potential risks that could impact sales growth. Additionally, Engine Capital, an activist investor, has taken a 3% stake in Avantor and is advocating for strategic changes to enhance shareholder value. Engine Capital suggested that Avantor has a strategic value of $17 to $19 per share in a potential sale scenario.
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