Fresenius climbs as JPM puts stock on Positive Catalyst Watch on Helios tailwinds

Investing.com -- JPMorgan has placed Fresenius SE on Positive Catalyst Watch ahead of its November 5 results, citing material upside potential from sector surcharge and inflator mechanisms in Helios Germany.

The analysts said the “most interesting takeaway” from the CEO call was the visibility on Helios Germany earnings trajectory, adding further confidence in the turnaround of both Helios and Kabi alongside progress on the exit from Fresenius Medical Care.

Shares in Fresenius rose 1.4% in Tuesday trading in Frankfurt. 

The German government has approved legislation for a €4 billion sector surcharge, which CEO Michael Sen described as roughly a 3% pricing boost for Helios Germany.

The measure still awaits presidential sign-off but is expected to take effect in November for 12 months. Sen noted that “there are not a lot of costs going against it,” implying high incremental margin potential.

With Helios Germany revenues projected at around €8 billion in 2025, JPMorgan calculates that a full 3% uplift would add about €240 million in revenue, which at full drop-through would lift Helios EBIT from roughly €676 million to €916 million and expand margins from about 8.4% to 11%.

A separate annual DRG inflator will also be set in the coming weeks. While an indicator of 5.1% was announced, management signalled that the final rate is likely to fall between that and the inflation rate in the low 3% range.

Analysts assume a 4% outcome on top of the surcharge, applying a more conservative 15% drop-through margin once cost inflation is considered.

Current consensus assumes only 3.8% sales growth for Helios Germany next year and incremental EBIT of €74 million.

JPMorgan argues that even under a worst-case scenario — 70% drop-through on the surcharge and a 3.5% DRG inflator — incremental EBIT could reach about €212 million.

The analysts note that consensus expects group incremental EBIT of €261 million in 2026 versus 2025, meaning Helios Germany alone could account for almost all of that if the surcharge and inflator flow through as expected.

They estimate that group EBIT could see around €150 million of uplift under its base case, equivalent to roughly 5% upside, rising to 8% in a more bullish scenario.

Fresenius remains rated Overweight and stays on the bank’s Analyst Focus List.