Sartorius: Macroeconomic Uncertainty Still Weighing on Sales Growth, Prolonging Reset Period

Management for wide-moat companies Sartorius AG and its bioprocessing subsidiary, Sartorius Stedim Biotech, reduced full-year fiscal 2023 guidance and announced preliminary third-quarter results that showed softness. After adjusting our forecasts to incorporate the weaker full-year expectations, we are maintaining our fair value estimates for both firms. Macroeconomic headwinds, uncertainty around investments by biopharmaceutical customers, and tough comparable periods may plague the firm for longer than previously expected, and this is the second time this year management has lowered full-year guidance due to these factors. Nevertheless, longer-term growth drivers for the Sartorius companies remain sound, in our opinion, and if shares decline substantially on this news, we think investors may want to view that as an opportunity to invest in strong life science with stellar long-term prospects.