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Investing.com -- RBC Capital Markets has upgraded its ratings on both Sartorius AG (ETR:SATG) and Sartorius Stedim (EPA:STDM) to Outperform from Sector Perform, highlighting the recent share price weakness as an opportunity to re-enter the names.
The brokerage believes that the roughly 14% pullback over the past two months has improved the risk-reward balance for both stocks.
“Underperformance over the last two months has swung the risk-reward to the upside,” analysts led by Charles Weston said in a Wednesday note, noting that the negative reaction to Sartorius’ recent in-line results contributed to the move lower.
While bioprocessing trends remain steady—with strong demand for consumables and persistently weak instrument sales—RBC sees room for upside if equipment demand recovers. Currently, equipment sales are acting as a drag of more than two percentage points on group sales.
“We don’t know when this will recover, but when it does, we would expect it to turn to a >2ppt tailwind, driving earnings upside and multiple expansion,” the analysts said.
RBC trimmed its price target for Sartorius AG to €250 from €260, reflecting slightly adjusted estimates, including tariff-related revenue adjustments and modest earnings per share (EPS) downgrades for 2026 and 2027.
The firm values Sartorius AG based on its 71.5% stake in Sartorius Stedim and an additional valuation for the Lab Products division, offset by higher debt levels.
Despite ongoing concerns around biotech funding, tariffs and pricing pressure in pharma, analysts believe sentiment could turn on signs of equipment recovery.
Although Q2 results were broadly in line, the stock experienced “significant intraday volatility around messaging on order levels,” they said.
RBC sees nearly 30% upside in Sartorius shares on a one-year view, supported by the potential for a rebound in equipment demand and stabilizing market sentiment.
In the wake of recent share price decline, the team believes that investors "have an opportunity to re-build their holdings at this level.”