Fresenius SE: A reassuring tone in Q3 following some uncertainties in Q2
BUY, Fair Value EUR112 (+16%)
Following a somewhat “weak” Q2 at Kabi, we believe Q3 gave some reassuring answers on this division with 7% organic growth. This performance was mainly driven by the US and despite some destocking on US Propofol as well as some pricing pressure in China. Regarding Helios, while organic growth was slightly below expectations at 3% in the quarter, we see Helios back at the high end of guidance in Q4. Margins on the other hand continued to show strong expansion at +120bps versus last year driven by the underlying performance and additional funding from the German states. The RHK transaction is expected to close before year end as this process is progressing according to plans. Finally, there is no doubt that Fresenius SE will be impacted by the dialysis reimbursement rebasing decision of Medicare due on November 27. Buy maintained and fair value of EUR112. Fresenius SE remains one of our top picks for 2013.
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