GS ups Carl Zeiss to 'neutral' as downgrade cycle is likely over

Carl Zeiss Meditec AG

29/01/2025 07:09

** Goldman Sachs ups German optical systems maker Carl Zeiss
Meditec  AFXG.DE  to "neutral" from "sell", citing a likelihood
of an end to downgrade cycle
    ** The stock underperformed in 2024 due to missed
expectations, as results consensus estimates were cut and
valuation multiples compressed, the broker says
    ** "The China Refractive business, which historically had
been an important driver of earnings growth and a key element of
the equity thesis, slowed as a result of a soft macro
environment and downtrading," GS says
    ** The broker believes expectations now have reached a
trough, although visibility remains low
    ** Despite consensus assumes another year of sharp
deterioration in China, GS does not see further downside to
estimates
    ** Still, the brokerage does not expect China Refractive to
return to the same level of growth as 2016-23 when SMILE was
gaining share in a buoyant market
    ** Shares in Carl Zeiss are up 1.3% in early Frankfurt trade

 (Reporting by Amir Orusov)
 ((Amir.orusov@thomsonreuters.com))