Fresenius Medical Care: UBS upgrades to 'buy'
(CercleFinance.com) - UBS has upgraded its "neutral" rating on Fresenius Medical Care (FMC), the German medical group that is specialised in dialysis.
Although the broker has trimmed its 12-month target price from 86 euros to 82 euros, this still represents upside potential of 20%.
The broker deems that the depreciation that has brought Fresenius Medical's P/E back to 14x, which has not been seen in nearly a decade, offers an attractive entry point.
In spite of investors' doubts (about the Californian referendum aiming to limit earnings of dialysis clinics), the sector's fundamentals remain intact, UBS says. After peaking at 19.2% in 2017, the margin of the group's dialysis business should return to 17.5% this year, although it will remain at this level for longer. However, the market seems to be pricing in a long-term rate of 16%.
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The information and analyses distributed by Cercle Finance are only intended as decision-making support for investors. Cercle Finance's responsibility may not be entailed, either directly or indirectly following the use of such information and analyses by readers. Any non-professional investor is recommended to consult a professional advisor before making any investment decision. This indicative information in no way constitutes any invitation to sell or buy securities.
Although the broker has trimmed its 12-month target price from 86 euros to 82 euros, this still represents upside potential of 20%.
The broker deems that the depreciation that has brought Fresenius Medical's P/E back to 14x, which has not been seen in nearly a decade, offers an attractive entry point.
In spite of investors' doubts (about the Californian referendum aiming to limit earnings of dialysis clinics), the sector's fundamentals remain intact, UBS says. After peaking at 19.2% in 2017, the margin of the group's dialysis business should return to 17.5% this year, although it will remain at this level for longer. However, the market seems to be pricing in a long-term rate of 16%.
Copyright (c) 2018 CercleFinance.com. All rights reserved.
The information and analyses distributed by Cercle Finance are only intended as decision-making support for investors. Cercle Finance's responsibility may not be entailed, either directly or indirectly following the use of such information and analyses by readers. Any non-professional investor is recommended to consult a professional advisor before making any investment decision. This indicative information in no way constitutes any invitation to sell or buy securities.