Euroapi plummets after outlook cut, mid-term guidance withrawal
10/10/2023 08:53
** Shares in Euroapi EAPI.PA slumped around 60% to their
lowest price ever after the French pharmaceutical company cut
its 2023 guidance and suspended its mid-term targets
** The company now expects net sales growth of between +3%
to +5% (vs +7% to +8% previously) and core EBITDA margin between
9% to 11% (vs 12.5% to 13.5% previously)
** The stock hit record low of 4.7 euros and today's losses
wiped off 643.3 million euros ($679.58 million) from the
company's market cap so far; if losses hold it will see its
worst day ever
** Euroapi said 2023 net sales slowdown is driven by
changing market environment, with pricing pressure for its API
Solutions, and delayed projects for its CMDO activities, leading
to Core EBITDA margin cut due to lower sales
** J.P.Morgan says the new guidance implies a 3% cut to 2023
consensus revenue expectations and a 25% cut to consensus core
EBITDA expectations
** Euroapi said it was launching a strategic review aimed at
adapting its operating model and suspended its 2023-2026
mid-term perspectives communicated earlier this year
** "Given the uncertainty over the mid-term outlook and both
revenues and margins, we expect the shares to be down at least
in line with the expected 2023 and 2024 Consensus earnings cuts
and hence see the shares off 30-35%," JPM adds
** Morgan Stanley cut its target price on the stock by 19%
to 10.5 euros
($1 = 0.9466 euros)
(Reporting by Clement Martinot)
((Clement.martinot@tr.com))