GS sees brighter outlook for European medical technology companies
12/07/2023 08:50
** Goldman Sachs initiates coverage of five European
healthcare companies, expecting brighter outlook for the medical
technology sector after a challenging period of supply-chain
constraints, high costs and margin pressures
** The broker's top picks are Philips PHG.AS ("buy") and
Fresenius Medical Care FMEG.DE ("buy"), as it forecasts an
upside potential to consensus
** GS believes Philips' strong momentum after the Q1 beat
will continue through the year, adding the sleep and respiratory
care business' (SRC) contribution to the FY 2026 group's EBITA
consensus is almost not reflected, which "creates an asymmetric
risk profile"
** The brokerage says for FMC "easing of external cost
pressure and new management focused on driving improved
performance under the new operating model can break the earnings
downgrade cycle"
** It initiates Siemens Healthineers SHLG.DE with
"neutral", noting that the valuation of the "high quality
business" is already fairly reflected in the current consensus
** The broker starts Fresenius FREG.DE with "neutral",
saying the company has "an attractive outlook for growth and
margin expansion with steady growth, stable margins and robust
FCF generation," which also makes consensus expectations in line
with the broker's current valuation
** GS starts Elekta EKTAb.ST with "sell" rating, saying
though there are solid medium-term drivers, it expects modest
gross and EBIT margins in 2024 as "selling, general, and
administrative expenses (SG&A) efficiencies are mostly offset by
a step up in R&D amortisation"
(Reporting by Amir Orusov)
((Amir.orusov@thomsonreuters.com))