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Investing.com -- Shares of Amplifon (BIT:AMPF) (MIL:AMP (OTC:AMLTF)) rose by 5% today following the company’s optimistic market growth outlook and solid first-quarter performance.
Bank of America (BofA) highlighted Amplifon’s reiteration of its forecast for approximately 10% growth in the French market by 2025, which is expected to be driven by the anniversary of the reform, starting from the second quarter and suggesting mid-teens growth from the second to the fourth quarter. This positive outlook is seen as a pivotal element for the company’s equity story.
The company’s management expressed confidence in the current activation trend of trials being in line with initial market expectations and Amplifon’s capability to leverage its investments from the previous year to capture the anticipated market growth in France. Additionally, BofA noted that there are no active discussions regarding reimbursement changes in France that would significantly affect the market or Amplifon.
The company’s effective cost management in the EMEA region and the lapping of prior year investments have led to margin expansion in the first quarter. Furthermore, anticipated revenue growth acceleration from the second quarter is likely to result in operational leverage and further margin recovery.
BofA analysts commented on the company’s prospects, saying, "We now see earnings inflection point, which logically should trigger multiple re-rating in the near-term. We continue to like Amplifon because 1) too much competition among hearing aid manufacturers should benefit retailers; 2) consensus expectations have been rebased (+7% CER for 25-27E); 3) geographical mix may finally become more favourable in 2025; 4) valuation is appealing at >10Y trough and sentiment seems to have reached a bottom."
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