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Investing.com -- UBS has upgraded DiaSorin SpA (BIT:DIAS) to “buy” from “neutral” rating, raising its price target to €98 from €95, saying the Italian diagnostics company is set to deliver above-sector revenue growth despite investor skepticism and a 20% share price decline so far this year, in a note dated Wednesday.
The brokerage said it expects DiaSorin to meet 2025 revenue and margin guidance, even if at the lower end, before accelerating in 2026 with 8% constant-currency growth and a 7% compound annual growth rate through 2030.
“Delivery of our numbers with a rich catalyst path while the shares price in substantial downgrades mean we upgrade our rating to Buy,” UBS analysts said.
DiaSorin’s immunodiagnostics division, which generates 70% of sales, has consistently outpaced the global immunoassay market.
UBS forecasted 8.3% growth in 2026, led by a 13% rise in North America, 6% in Europe and 4% in the rest of the world.
“We leverage CMS data shows why Diasorin’s US hospital strategy has driven operational outperformance, and still has plenty of runway over the medium term,” the analysts said.
UBS expects the Saluggia-headquartered company’s molecular business to grow 12.3% in 2026, driven by demand for high-plex tests including Liaison Plex, while its licensing and technology group is projected to expand 4.5%.
The brokerage noted that these forecasts exclude contributions from pipeline launches such as LymeDetect, Calprotectin 3.0, Liaison XXL and Liaison NES, which could provide additional upside.
For the near term, UBS pointed to catalysts starting with third-quarter earnings on Nov. 5. It said consensus forecasts are 5% too high on adjusted EBITDA, but argued that investors already expect a downgrade that is unlikely to materialize.
In the fourth quarter, UBS projected a 9% constant-currency revenue growth exit rate excluding Covid-related sales, which it said would support at least 8% guidance for 2026.
Financially, revenues are projected to rise from €1.23 billion in 2025 to €1.30 billion in 2026 and €1.49 billion in 2028. EBIT is forecast to improve from €315 million in 2025 to €423 million by 2028, with net earnings climbing from €238 million to €319 million over the same period.
Diluted EPS is set to grow from €4.27 in 2025 to €5.72 in 2028, while the dividend is expected to increase from €1.19 to €1.60.
Profitability metrics show EBIT margin holding at 25.6% in 2025 before rising to 28.4% in 2027. Return on invested capital is forecast to grow from 12.8% in 2025 to 17% in 2027.
UBS values the stock at 18.3 times 2025 earnings, falling to 13.6 times by 2028, with equity free cash flow yield improving from 3.7% in 2025 to 6.6% in 2028.
UBS raised its target on a discounted cash flow model using an unchanged weighted average cost of capital of 8.7% and a terminal growth rate of 2.5%.
“Our PT implies a c.15% sector premium, which we think particularly justified next year when Diasorin should grow faster than the sector while remaining relatively insulated from most sector-wide risks,” the analysts said.