Evotec - Another Warning – PT Cut to €5.40 (SELL, TP EUR5.40 [7], 9pgs)
Following yesterday's cut to sales guidance, we cut our PT to €5.40 and L-T revenues by 10-15%. We are 40% below consensus EBITDA in 2028 despite including significantly more cost savings. We show the base business is loss making this year & could just break even in 2026. We are most concerned about the reliance on single lumpy contracts. The SDZ milestones will mostly disappear by 2028 & the commercial revenues required to offset them imply biosimilar sales of €550m by 2030 for drugs that will launch in 2028/29. The turnaround will be slow & protracted with growing concerns around the debt, in our view. SELL. For access to the full note, please contact Naresh Chouhan ( )Evotec is a holding company engaged as a drug discovery solutions company providing drug discovery capabilities to pharmaceutical and biotechnology companies as well as to academic institutions. These drug discovery solutions are provided in form of fee-for service work, integrated drug discovery alliances, development partnerships, licensing of drug candidates and consulting arrangements. Co. is primarily involved in the areas of neuroscience, pain, metabolic diseases, oncology and inflammation. Co. provides its drug discovery activities under the banners of EVT Execute, EVT Integrate and EVT Innovate. Co.'s operations are divided into two segments: EVT Execute and EVT Innovate.
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