Investing.com -- With a price increase of 1.30%, Fresenius shares (ETR:FREG) ranked second in the German benchmark DAX index on Thursday. Positive share price impetus was provided by a capital market day in London centered around its pharmaceuticals and medical technology subsidiary Kabi.
Fresenius Kabi, which focuses on sales of infusion solutions, clinical nutrition and biosimilars, now expects mid-single-digit organic sales growth this year, the presentation said. Previously, management had expected low- to mid-single-digit sales growth. From 2022 to 2026, Kabi targets organic sales growth of 4% to 7% annually.
Fresenius Kabi now sees the EBIT margin at 14% instead of one percentage point below the medium-term target of 14%-17%. The upper end of the margin range is expected to be reached by 2026.
Fresenius shares have gained 4.2% so far this year, but lost almost 14% over one year. In recent months, the stock has been weighed down mainly by the high debt burden against the backdrop of rising interest rates and sluggish business at Fresenius Medical Care (ETR:FMEG) and Vamed, which are to be held only as financial investments in the future under a plan unveiled at the beginning of the year. Instead, Fresenius will focus on its two mainstays - Kabi and Helios.
While the 16 analysts covered by Investing.com have a consistently positive view of the Fresenius share on a 12-month horizon and have an average price target of around €37 (€1=$1.0727), the return potential is somewhat more moderate according to InvestingPro's fair value estimate, which is based on 11 financial models. Accordingly, the stock offers a price potential of 14% to the fair value of €31.21.