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Investing.com -- Jefferies has initiated coverage on Sartorius ordinary shares (ords) with a Buy rating and a €210 price target, while upgrading the preference shares (prefs) to Buy from Hold and raising the target to €263.
The bank maintained its Buy on Sartorius Stedim (EPA:STDM) Biotech (VIE:DIM) but cut the price target to €229 from €245.
The new coverage on Sartorius reflects the bank’s view that the market could increasingly focus on the relative value between the ords and prefs, especially ahead of a potential shift in the shareholder structure in 2028.
The current float of SRT ords is about 7%, with the majority held in the “Horst Sartorius Community of Heirs,” which will dissolve in July 2028.
“Logically we would expect the market to focus more on the discount of the Ords to the Prefs (currently -18%),” analyst James Vane-Tempest said in a note.
The preference shares carry no voting rights but offer a one-cent higher dividend per share and are significantly more liquid, with average daily turnover of about $32.8 million compared to $1.4 million for the ordinaries.
Jefferies applies a 20% discount to the ordinaries versus the preference shares in its valuation.
The broker’s analysis also points to potential changes in Bio-Rad’s stake in SRT, currently at 37.9%, which could rise to 40.2% if a 2021 loan to a holding company controlled by one of the heirs is settled in shares when the trust dissolves.
Jefferies’ forecasts imply that the market is pricing in below-market growth for both prefs and Sartorius Stedim Biotech shares, despite company guidance for low-teens annual sales growth through 2028.
The firm’s price targets for the two correspond to full-year 2026 EV/EBITDA multiples of 22.2x and 23.7x, respectively.