HSBC downgrades Synlab as inflation to weigh on margins

Synlab AG

21/03/2023 13:19

** HSBC cuts Synlab  SYAB.DE  to "hold" from "buy", citing
challenges caused by inflation and reduced growth opportunities
    ** Based on high inflation pressure, HSBC expects the German
medical diagnostic services provider to slowly recover in
margins in 2023
    ** HSBC sees limited growth potential given that most of
productivity improvement through digitisation and optimisation
of lab infrastructure is likely to have already been obtained
    ** It also points to "regulatory headwinds that the industry
faces" 
    ** "The main risk to our rating remains an offer price at a
strong premium from Cinven or another acquirer", HSBC says
    ** Last week, a non-binding offer from Cinven to acquire up
to 100% of Synlab shares sent the stock up around 30% 
    ** However, the management's expectations of slow recovery
have reduced confidence, the brokerage says

 (Paolo Laudani)
 ((Paolo.Laudani@thomsonreuters.com))