Vitrolife (Buy, TP: SEK340.00) - Integration/restructuring ongoing
We expect a slightly softer Q3 QOQ; however, Vitrolife is in the midst of a reorganisation, shifting focus to profitable growth – and the benefits have yet to materialise (the Q3 results are due at 08:00 CET on 27 October). We estimate it will book one-off restructuring costs of SEK20m–40m, split over Q3 and Q4; however, we do not include any in our forecasts. We reiterate our BUY, but have cut our target price to SEK340 (410) to reflect lower market valuations for growth companies and peer companies trading at larger discounts to historical multiples.Vitrolife AB is a Sweden-based company engaged in assisted reproduction services. The Company's product portfolio comprises G-RINSE, which is a solution for rinsing of contact materials, EmbryoGlue, which is a human albumin recombinant, ASP, which is a solution for oocyte retrieval and rinsing, and Semen VTS, which is a viscosity treatment system, among others. It also provides a range of procedural solutions for sperm preparation, vitrification, embryo transfer and oocyte retrieval, such as temperature control, condition control, gamete-safe labware and embryo support. The Company is active in Australia, China, France, Italy, Japan, the United States and the United Kingdom, among others, and conducts its business through a number of subsidiaries, such as Vitrolife Ltd., Vitrolife Pty Ltd., and A.T.S. Srl.
DNB Markets is the investment banking arm of DNB Bank ASA and is focused primarily on the Nordic region, as well as internationally on niches such as global shipping, energy and related services, and seafood. DNB Markets offers services in FICC, Equities and Investment Banking advisory from offices in Oslo, Stockholm, London, Singapore and New York. Equity research coverage is offered on c250 Nordic companies. DNB was ranked no.2 in Extel Nordic Research 2017. The DNB Markets’ Credit and FICC Macro & FX Research teams are repeatedly highly rated by Prospera Nordic Institutional Investor Surveys.
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