Betting on the Horse

Vitrolife (Buy, TP: SEK230.00) - Disappointing start to 2025

Q1 sales undershot consensus by c3% and EBITDA by c11%, with earnings missing across the board. Organic sales growth was c3% (excluding discontinued operations equating to close to 3% of total sales). Divisionally, Technologies saw the largest deviations versus consensus (although it can be volatile quarter to quarter). On the positive side, the lawsuit in the US related to PGT-A has not had any negative impact on those sales. We reiterate our BUY, but have cut our target price to SEK230 (255).

Soft Q1 driven by weak APAC sales

Fear over PGT-A lawsuit overdone

Vitrolife (Buy, TP: SEK255.00) - Growth and margins in focus

We expect market focus on growth (especially within Genomics) and margins. Vitrolife indicated an increase in the sales organisation, and we believe there could be costs associated with the class action suits related to PGT-A in the US. There is a risk the PGT-A turbulence could result in a slow recovery in Genomics growth, although the company said there has been no visible impact on PGT-A demand so far. We reiterate our BUY, but have cut our target price to SEK255 (265).

Executive order to improve IVF access

Vitrolife (Buy, TP: SEK265.00) - Strong Q4 earnings

Q4 earnings were stronger than expected. Sales were in line with our estimate and consensus (c1% above), while adj. EBITDA was c5% higher, driven by a stronger-than-expected gross margin (61.1% versus our 58.4% estimate). Vitrolife is set to exit some markets in 2025 that would hit sales and profitability. We reiterate our BUY, but have lowered our target price to SEK265 (270).

Confirming our case with a strong end to '24

Strong Q4 driven by sales and gross margin

Making the dream come true

Terminating coverage

Vitrolife (Buy, TP: SEK270.00) - A decent end to the year

We believe Vitrolife will end the year with decent growth and healthy cash flow, even though we expect softer earnings than consensus (in line on revenues and c2% below on adj. EBITDA). Growth for Consumables should remain in the low double-digits, while Technologies has tough comparables after a strong Q4 2023. We forecast organic growth in the low- to mid-single digits and reiterate our BUY, but have cut our target price to SEK270 (280).

On the right track

Mixed results in Q3

Improved sales growth in Q3e

Vitrolife (Buy, TP: SEK280.00) - Underlying trends set to continue

Vitrolife stock has recovered nicely since its Q2 report (up c33% since the day before the report). We believe most of the Q2 trends that triggered the revaluation of Vitrolife remain, heading into the Q3 results. For the quarter, we are c1% below consensus on sales and c4% below on adj. EBITDA. We have increased our forecasts from 2025 and our target price to SEK280 (250). We reiterate our BUY.

Technology business shines in Q2

Higher sales and gross margin in Q2. EBITDA revised up 2.2%-3.3% for '24e-'26e. Valuation below historical multiples, but above sector peers.

Vitrolife (Buy, TP: SEK250.00) - Solid beat in Q2

A 3% beat in sales versus consensus was led by Technologies, while a stronger group gross margin (c270bp above our forecast and consensus) fuelled the 10% adj. EBITDA outperformance. Following the results, we have raised our 2024–2026e EPS by 8–10% and our target price to SEK250 (210); we reiterate our BUY.

Earnings beat on higher sales and gross margin

Still waiting for growth to return in Genetics

Q2'24 results due 17 July. We expect flat organic sales growth but improving margins in Q2. EBITDA '24e-'26e down +1.0-1.5%.