Fresenius SE Earnings: Strong Results at Upper End of Guidance; Shares Surge 7%

Narrow-moat Fresenius SE delivered on its guidance, which was raised last quarter, closing the full-year 2024 with 8% organic revenue growth and 10% EBIT growth, while its margin expanded by 40 basis points compared with the previous year. The fourth quarter saw a boost in operating income, outpacing earlier quarters of the year. Fresenius reinstated its dividend at EUR 1 per share and announced a new dividend policy of a 30%-40% payout of core net income (excluding medical care), compared with 30% or less in 2022 and earlier. Investors reacted positively, with shares jumping 7% at market opening Feb. 25. We maintain our fair value estimate of EUR 53 per share, which we increased last quarter, and we continue to view shares as undervalued.