Fresenius Medical Care's stock has plunged to the lowest point within the DAX, prompting concern among investors.
Updated Article:
Hey there! Let's dive into today's market news, focusing on Fresenius Medical Care (FMC), a key player in the German benchmark index, the DAX. Despite a significant drop in the DAX around midday, FMC has taken the hardest hit, losing nearly five percent.
Today happens to be FMC's capital market day, and although an initial share buyback program offered some stability, the medium-term targets announced later sparked a wave of skepticism. The company is aiming to achieve an operating margin in the mid-teens by 2030, a target that analyst James Vane-Tempest from Jefferies finds in line with market expectations, but highlights the absence of a specific revenue target as a concern.
David Adlington from JPMorgan, on the other hand, has been questioning FMC's revenue growth potential since early June. He emphasizes that growth has been slowing for quite some time and notes that, apart from COVID-19, other factors have played a role in hindering growth. Unable to rely solely on increased volume, FMC is forced to increase profits through cost-saving measures which, while important, are limited.
In response to the revenue growth concerns, FMC has extended its cost-cutting program to 2027, aiming to achieve a total savings of 1.05 billion euros – 300 million more than previously planned. The announced share buyback is set to start in 2025 and could amount to up to one billion euros, split into several tranches over two years.
It's important to note that FMC's stock is down around five percent and is currently not a recommendation of AKTIONÄR, but the investment firm continues to favor Fresenius. While FMC may be under pressure today, recent insights suggest the company is on a positive trajectory, with strong financial results, operational efficiencies, and margin improvements, driven by the FME Reignite strategy.
Remember, there's more to FMC's financials and growth potential than what meets the eye. Analysts express cautious optimism, focusing on the need for continuous improvement in payor and service mix, cost-saving delivery, and patient volume management to sustain revenue growth and margin expansion. However, they do not predict significant losses for the company.
Stay tuned for more updates! 📈🚀
- Investors might be interested to know that FMC's capital market day announcement, amidst a drop in the DAX, sparked skepticism due to the absence of a specific revenue target despite an aim to achieve an operating margin in the mid-teens by 2030.
- As FMC's stock-market performance is under pressure today, with a net loss of nearly five percent, analysts are focusing on the need for continuous improvement in payor and service mix, cost-saving delivery, and patient volume management to sustain revenue growth and margin expansion.
