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Eurofins Scientific SE ERF

Morningstar Rating
€59.08 +1.66 (2.89%)
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Company Report

Eurofins Earnings: Fair Value Estimate Reduced Mildly, but Results and Guidance Roughly in Line

Narrow-moat Eurofins reported full-year results and forward guidance that were in line with our expectations. However, we are reducing our fair value estimate to EUR 72 from EUR 75, driven mostly by adjustments to our assumptions on price/sales ratios for acquisitions over the next five years and minor tweaks to our growth assumptions. We continue to view shares as moderately undervalued and believe that Eurofins will be able to improve its profit margins over the next 2-3 years while maintaining mid-single-digit organic growth.

Price vs Fair Value

ERF is trading at a 22% discount.
Price
€55.92
Fair Value
€71.00
Uncertainty
Medium
1-Star Price
€67.20
5-Star Price
€52.70
Economic Moat
Swfpcw
Capital Allocation
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Bulls Say, Bears Say

Bulls

Eurofins has consistently delivered organic growth greater than global economic growth, a sign of consistent share gains despite high market competition and fragmentation.

Bears

Operating margins have fallen recently due to wage inflation in Europe, and it remains to be seen to what extent Eurofins can increase pricing to improve margins.

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Trading Information

Previous Close Price
€57.42
Day Range
€57.5859.10
52-Week Range
€44.8365.24
Bid/Ask
€58.40 / €59.12
Market Cap
€11.34 Bil
Volume/Avg
432,940 / 321,308

Key Statistics

Price/Earnings (Normalized)
20.48
Price/Sales
1.79
Dividend Yield (Trailing)
1.69%
Dividend Yield (Forward)
1.69%
Total Yield
2.11%

Company Profile

Eurofins, headquartered in Luxembourg, is a decentralized network of life sciences companies that provide various analytical tests and laboratory services. These include tests to evaluate the safety, identity, composition, authenticity, purity, origin, and traceability of various biological substances and products. Eurofins operates over 900 laboratories in 61 countries. Its revenue from Europe, North America, and the Rest of the World contribute approximately 50%, 40%, and 10% of total revenue respectively. Its areas of business activity are food, feed, and environmental testing ("Life"), biopharmaceutical services, diagnostic services and products, and consumer and technology products testing, which contribute approximately 40%, 30%, 20%, and 10% respectively.
Sector
Healthcare
Industry
Diagnostics & Research
Stock Style Box
Mid Core
Total Number of Employees
61,798

Competitors

Valuation

Metric
ERF
BVI
ITRK
Price/Earnings (Normalized)
20.4820.2621.50
Price/Book Value
2.787.576.08
Price/Sales
1.792.202.43
Price/Cash Flow
11.5615.3515.39
Price/Earnings
ERF
BVI
ITRK

Financial Strength

Metric
ERF
BVI
ITRK
Quick Ratio
1.341.421.02
Current Ratio
1.451.431.09
Interest Coverage
4.188.6110.40
Quick Ratio
ERF
BVI
ITRK

Profitability

Metric
ERF
BVI
ITRK
Return on Assets (Normalized)
5.44%7.88%10.16%
Return on Equity (Normalized)
13.87%31.80%28.28%
Return on Invested Capital (Normalized)
7.66%12.41%14.92%
Return on Assets
ERF
BVI
ITRK
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A
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