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Investing.com -- Sartorius (ETR:SATG) shares increased by more than 11% on Tuesday, following its preliminary 2024 results, which posted a strong fourth-quarter performance, exceeding market expectations, particularly in the Bioprocessing division.
“Investors focus heavily on order intake, which was up around one-quarter in both divisions, outperforming a flat consensus forecast,” said analysts at RBC Capital Markets in a note.
The standout driver for the stock’s rally was the robust growth in order intake, which rose considerably in both the Bioprocessing and Lab Products divisions.
This improvement pointed to strong customer demand, especially in Bioprocessing, where revenue was about 2.5% higher than consensus forecasts, and margins saw a 1 percentage point beat.
Sartorius noted that consumables performed particularly well, as many biopharma customers were reaching their target inventory levels, a trend that boosted the company’s sales figures.
Advanced therapies were also highlighted as a key growth driver, even as demand for bioprocessing equipment remained subdued.
In terms of regional performance, the EMEA region led, followed by the Asia-Pacific area despite weak demand from China, and the Americas, which saw slower performance.
“Business development in the second half of the year, and especially in the final quarter, confirms our estimate that the temporary weakness in demand is coming to an end and that the industry will gradually return to its robust, structurally underlying growth trend,” said Joachim Kreuzburg, chief executive at Sartorius in a statement.
Analysts flagged that the company’s overall growth trajectory is likely to continue outperforming a gradually improving market. Sartorius has guided for moderate growth in 2025, with both divisions expected to expand, though Bioprocessing is anticipated to lead.
This guidance was qualitative, with management citing an ongoing demand recovery in the life sciences market, albeit at a pace below long-term averages.
Investors are particularly focused on Sartorius’ ability to maintain profitability and expand margins, and analysts expect that the company will continue to post favorable results for the year, although specific quantitative guidance will not be provided until the Q1 earnings release.
In the Lab Products division, while revenue exceeded consensus expectations by 4 percentage points on an underlying basis, margins were slightly softer than expected, resulting in a small miss on EBITDA.
The softer performance was attributed to challenging market conditions, particularly in China, which has been affecting demand for lab products.
However, strong performance in Bioprocessing and robust order intake across both divisions mitigated these concerns. Analysts at RBC Capital Markets believe Sartorius can sustain growth.