Eurofins Earnings: Revising Full-Year Guidance; Maintaining Strong Growth Amid Undervalued Shares

For the third quarter of 2024, narrow-moat Eurofins reported revenue of EUR 1.72 billion, slightly below the consensus compiled by PitchBook, representing 4.4% organic growth in its core business on a year-over-year basis. The nine-month revenue progression is EUR 5.1 billion, which is 72% of the full-year guidance. However, management lowered its expectation for full-year 2024 revenue from the EUR 7.075 billion-EUR 7.175 billion range to EUR 7 billion. Investors reacted negatively to this earnings report, with the share price losing more than 10% after the market opened. We believe that investors have overreacted, as the lower guidance still suggests 7.5% revenue growth on a year-over-year basis, which is higher than the peer average. We maintain our fair value estimate at EUR 72 per share and view the shares as undervalued, with almost 50% upside potential.