Evotec Earnings: Slow Start to 2024 but Macroeconomic Pressure Easing Soon; Shares Undervalued

No-moat Evotec’s first-quarter results were roughly as expected, and we maintain our fair value estimates of EUR 14 per share and $7.60 per share. Revenue declined 2% year over year, as strength in the biologics manufacturing business was largely offset by continued headwinds from weak biopharmaceutical customer demand and a tough comparable period in the drug discovery and partnership businesses. Shares are currently trading in 4-star territory, about 31% below our fair value estimate.