Vitrolife (Buy, TP: SEK210.00) - Soft start to the year

Q1 earnings were softer than expected, with sales and adj. EBITDA c3% below consensus, despite the downward revisions to consensus ahead of the results. Genetics was positively affected by stocking effects in H1 2023, making for challenging comparables in Q2 as well. However, we see potential for a turnaround in Genetics in Q3. We reiterate our BUY, but have cut our target price to SEK210 (230) on revised forecasts.

Vitrolife (Buy, TP: SEK230.00) - Set for a soft start to 2024

We expect Vitrolife to report a relatively soft start to 2024 (Q1 results due at 08:00 CET on 18 April). We believe Consumables and Technology continued to perform well, but that the turnaround in Genetic Services failed to materialise (with tough comparables due to the loss of some US contracts in the US late in Q1 as well as strong sales of genetic kits in Q1–Q2 last year due to stocking, which we expect to normalise this year). We are in line with consensus on 2024e adj. EBITDA but just below...

Vitrolife (Buy, TP: SEK230.00) - No drama in pre-announced Q4

We see no drama in the Q4 report, as the earnings were pre-announced (23 January), at which time Vitrolife also announced a non-cash write-down of SEK4.3bn in goodwill related to the Igenomix acquisition. Overall, the company sounds optimistic for the coming years and stated that the growth ambition is above the overall market growth. We reiterate our BUY and have raised our target price to SEK230 (220).

Vitrolife (Buy, TP: SEK220.00) - Goodwill writedown likely in Q4e

We forecast Q4 earnings below consensus and expect Vitrolife to announce a goodwill writedown of cSEK3bn. We initially expected this in Q4 2022; however, with higher interest rates and poor performance in Genetic Services during the year, we believe a writedown is more likely in Q4. We reiterate our BUY, but have cut our target price to SEK220 (250) on our reduced forecasts.

Vitrolife (Buy, TP: SEK250.00) - Mixed report

The Q3 report was mixed, with sales and the gross margin weaker than expected but the EBITDA margin stronger due to cost-saving initiatives. The sales miss was due to weakness in Genetic Services and Consumables, while Technology was stronger than expected. We expect improved sales in Genetic Services within a few quarters, and other areas to be stronger short-term. We reiterate our BUY but have cut our target price to SEK250 (280).

Vitrolife (Buy, TP: SEK280.00) - Minor estimate revisions

We have made only minor estimate changes ahead of the Q3 results due at 08:00 CET on 27 October. We expect good underlying growth for Consumables and Technology, but Genetic Services to be still hampered mainly by the ongoing decline in ERA testing. We are slightly below consensus for Q3e, but in line for 2023e. We reiterate our BUY and SEK280 target price.

Northern Lights

Vitrolife (Buy, TP: SEK280.00) - Q2 softer than expected

Vitrolife reported weaker than expected Q2 earnings. Sales were c4% below our forecast and adj. EBITDA was c5% below our forecast. Consumables were very strong, while revenues for Technologies and Genetic services fell short. The share price slumped on the day, but we consider this somewhat of an overreaction. We reiterate our BUY but have cut our target price to SEK280 (320) on lowered forecasts.

Northern Lights

Vitrolife (Buy, TP: SEK320.00) - Q2e largely in line with consensus

We are broadly in line with consensus on Q2e, estimating a slightly higher top line but lower margins, as we expect higher costs due to salary inflation from Q2. Overall, we believe the near-term outlook is strong, as the fact that China’s Year of the Dragon starts on 10 February 2024 should boost H2e sales. We reiterate our BUY but have cut our target price to SEK320 (340) on forecast revisions.

Northern Lights

Vitrolife (Buy, TP: SEK340.00) - Strong start to 2023

Q1 sales and earnings were stronger than we expected, but the adj. EBITDA margin missed our estimate by c60bp. Organic sales growth (excluding divested operations) was c9% YOY, which we consider solid. No guidance was provided for 2023 (or expected as the new permanent CEO is due to start in August). We consider the share price reaction following the report (+4%) on the conservative side and reiterate our BUY and SEK340 target price.

Vitrolife (Buy, TP: SEK340.00) - On course for a healthy Q1

We expect healthy underlying growth for Q1 (results due at 08:00 CET on 21 April), but highlight the seasonal pattern in the Igenomix operations as well as the lack of Covid-19 testing and terminated GPDx operations (which will affect YOY comparisons for Igenomix). We reiterate our BUY and SEK340 target price.

Northern Lights

Vitrolife (Buy, TP: SEK340.00) - Sharp share rebound

Q4 earnings were broadly in line with expectations – and despite healthy share price performance YTD (before the report), Vitrolife traded up c16% on the report. We believe this could have been: 1) a relief reaction to it not writing down any goodwill from the Igenomix acquisition; or 2) growing confidence that the IVF market will continue to grow strongly in markets such as China in the coming years. We reiterate our BUY and SEK340 target price.

Vitrolife (Buy, TP: SEK340.00) - Sharp share rebound

Q4 earnings were broadly in line with expectations – and despite healthy share price performance YTD (before the report), Vitrolife traded up c16% on the report. We believe this could have been: 1) a relief reaction to it not writing down any goodwill from the Igenomix acquisition; or 2) growing confidence that the IVF market will continue to grow strongly in markets such as China in the coming years. We reiterate our BUY and SEK340 target price.

Vitrolife (Buy, TP: SEK340.00) - Operations progressing well

We expect a strong Q4 report, with earnings driven by growth in consumables and technology. The restructuring of recently acquired Igenomix continues and management seems confident it will reach the 30% margin target in 2023, although we see a risk of a goodwill write-down related to the acquisition. However, we believe this should be a technicality and not affect the cash flow or valuation. We reiterate our BUY and SEK340 target price.

Sector Fast Comment - Hospital data update

Better hospital margins in September Weaker procedure volume momentum into Q4 Small positive for capex exposure

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Vitrolife (Buy, TP: SEK340.00) - Margins surprise in Q3

While Q3 reported sales were in line with expectations, the adj. EBITDA margin surprised positively, largely due to lower operating expenses than we forecast. Vitrolife also indicated that Igenomix’s underlying margin was in line with the guidance, and that it sees further potential over time. We reiterate our BUY and SEK340 target price, with just small estimate changes after the report.