Barclays has revised its price target for Avantor (AVTR, Financial), cutting it from $18 to $15, while maintaining an Overweight rating on the company's shares. This decision follows the release of Avantor's first-quarter report.
The reduction in the price target reflects anticipated challenges, as the company's core guidance was already expected to face hurdles. However, the omission of potential tariff impacts from Avantor's outlook has sparked significant negative feedback among investors, according to the analyst's note.
Wall Street Analysts Forecast
Based on the one-year price targets offered by 20 analysts, the average target price for Avantor Inc (AVTR, Financial) is $17.96 with a high estimate of $30.00 and a low estimate of $14.00. The average target implies an upside of 38.90% from the current price of $12.93. More detailed estimate data can be found on the Avantor Inc (AVTR) Forecast page.
Based on the consensus recommendation from 24 brokerage firms, Avantor Inc's (AVTR, Financial) average brokerage recommendation is currently 2.5, indicating "Outperform" status. The rating scale ranges from 1 to 5, where 1 signifies Strong Buy, and 5 denotes Sell.
Based on GuruFocus estimates, the estimated GF Value for Avantor Inc (AVTR, Financial) in one year is $21.25, suggesting a upside of 64.35% from the current price of $12.93. GF Value is GuruFocus' estimate of the fair value that the stock should be traded at. It is calculated based on the historical multiples the stock has traded at previously, as well as past business growth and the future estimates of the business' performance. More detailed data can be found on the Avantor Inc (AVTR) Summary page.
AVTR Key Business Developments
Release Date: April 25, 2025
- Reported Revenue: $1.58 billion for Q1 2025.
- Organic Revenue Decline: 2% year-over-year.
- Adjusted Gross Margin: 33.8%, a decline of 20 basis points year-over-year.
- Adjusted EBITDA: $270 million, representing a 17% margin, a 20 basis points improvement year-over-year.
- Adjusted EPS: $0.23, a $0.01 improvement year-over-year.
- Free Cash Flow: $82 million in Q1 2025.
- Adjusted Net Leverage: 3.2 times adjusted EBITDA.
- Lab Solutions Revenue: $1.07 billion, a 3% organic decline year-over-year.
- Bioscience Production Revenue: $516 million, flat year-over-year on an organic basis.
- Adjusted Operating Income for Lab Solutions: $139 million, with a 13.1% margin.
- Adjusted Operating Income for Bioscience Production: $123 million, with a 23.9% margin.
- Revised 2025 Guidance for Organic Revenue Growth: Negative 1% to positive 1%.
- Expected Adjusted EBITDA Margin for 2025: 17.5% to 18.5%.
- Expected Adjusted EPS for 2025: $1.02 to $1.10.
- Expected Free Cash Flow for 2025: $650 million to $700 million.
- Cost Transformation Initiative Savings: Expected $400 million in run rate gross savings by the end of 2027.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Avantor Inc (AVTR, Financial) delivered earnings and margin in line with their plan despite challenging market conditions.
- The company is implementing a delivery excellence initiative to enhance supply chain efficiency and resilience.
- Avantor Inc (AVTR) is accelerating digital enhancements, including the rollout of a new AI-enabled e-commerce platform.
- The company expanded its portfolio with new products and distribution agreements, including a significant agreement with Abcam.
- Avantor Inc (AVTR) achieved a 25% outperformance in their multi-year cost transformation initiative, with plans to increase savings to $400 million by 2027.
Negative Points
- Revenue in both segments fell short of expectations, with a 2% decline in organic revenue year-over-year.
- The company is facing demand weakness in key markets, particularly in education and government sectors.
- Funding for bench-stage biotech companies fell approximately 40%, impacting demand in biopharma end markets.
- Avantor Inc (AVTR) revised its full-year revenue guidance downward due to continued macro and policy-related headwinds.
- Increased competitive intensity led to reduced volumes at some customer accounts, affecting overall performance.
