Fresenius Med. Care: All eyes are on November 27
BUY, Fair Value EUR53.5 (+9%)
We found some reassuring trends in the Q3 release such as the strong organic growth at 6% and the dynamic performance of services more globally. Management made some encouraging comments about the need for “a strong Q4” to reach guidance. Nevertheless, there is no doubt that all the focus from investors is turning on the CMS decision on November 27. Nothing more specific on this precise item, though management reiterated that a draconian cut would certainly imply clinic closures for the industry. We continue to like FMC for its long-term prospects but acknowledge that uncertainty is peaking before November 27. Marginal changes to our FY 2013 numbers which are aligned with the company’s guidance with sales higher than EUR14.6bn and net income at USD1.1bn.
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