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Fresenius SE & Co KGaA FRE

Morningstar Rating
€27.67 +0.29 (1.06%)
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Company Report

Obesity Drug's Effects on Dialysis Likely To Be Less Than Feared

GLP-1 drug use is increasing materially in patients with diabetes and obesity, and uncertainty around GLP-1 expansion has added risk to dialysis stocks even as pandemic challenges, including excess mortality and labor costs, are easing for the narrow moat dialysis companies we cover—Baxter, DaVita, Fresenius Medical Care, and Fresenius SE. Despite the concerns, new data rolling in on GLP-1s appears roughly in line with our view that GLP-1 expansion should not materially affect dialysis demand for at least the next decade, as mildly extended kidney disease progression to dialysis may be largely offset by cardiac and first-year survival, or "crash," benefits. Considering this roughly neutral outlook, we find the significant discounts to fair value in dialysis-related stocks compelling.

Price vs Fair Value

FRE is trading at a 45% discount.
Price
€27.38
Fair Value
€84.00
Uncertainty
High
1-Star Price
€88.20
5-Star Price
€25.00
Economic Moat
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Capital Allocation
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Bulls Say, Bears Say

Bulls

Underlying demographic trends and international expansion opportunities should keep Fresenius’ dialysis services and related medical product growth in positive territory as the pandemic recedes.

Bears

Until the US achieves universal affordable coverage, policy risks around reimbursement for dialysis services may continue to add risk to the story.

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News

Trading Information

Previous Close Price
€27.38
Day Range
€27.4727.78
52-Week Range
€23.9331.22
Bid/Ask
€27.67 / €27.69
Market Cap
€15.58 Bil
Volume/Avg
211,070 / 1.1 Mil

Key Statistics

Price/Earnings (Normalized)
5.99
Price/Sales
0.67
Dividend Yield (Trailing)
3.45%
Dividend Yield (Forward)
Total Yield
3.36%

Company Profile

Fresenius SE is a healthcare holding company based in Germany. The company owns a minority stake in dialysis service provider and equipment manufacturer Fresenius Medical Care. The Kabi segment manufactures intravenous drugs, nutrition products, infusion and transfusion therapies, and related pumps. The Helios segment operates private hospitals primarily in Germany and Spain. Vamed provides a variety of services such as healthcare facility construction and operation management, including post-acute care rehabilitation.
Sector
Healthcare
Industry
Medical Care Facilities
Stock Style Box
Mid Value
Total Number of Employees
193,865

Competitors

Valuation

Metric
FRE
ICUI
DVA
Price/Earnings (Normalized)
5.9914.3315.81
Price/Book Value
0.791.1011.15
Price/Sales
0.671.031.02
Price/Cash Flow
8.877.736.62
Price/Earnings
FRE
ICUI
DVA

Financial Strength

Metric
FRE
ICUI
DVA
Quick Ratio
0.640.911.06
Current Ratio
1.342.531.19
Interest Coverage
2.120.163.95
Quick Ratio
FRE
ICUI
DVA

Profitability

Metric
FRE
ICUI
DVA
Return on Assets (Normalized)
2.15%0.54%6.40%
Return on Equity (Normalized)
7.52%1.13%112.35%
Return on Invested Capital (Normalized)
3.57%2.60%10.05%
Return on Assets
FRE
ICUI
DVA
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Medical Care Facilities Industry Comparables

Ticker
Name
Morningstar Rating for Stocks
Capital Allocation
Economic Moat
Market Cap
HCA
HCA Healthcare IncZjghxbrsSdwmyv$82.1 Bil
FSNUF
Fresenius SE & Co KGaAJjwvgtz$16.4 Bil
FSNUY
Fresenius SE & Co KGaA ADRKvwqm$16.4 Bil
FMCQF
Fresenius Medical Care AGNspkvy$12.2 Bil
FMS
Fresenius Medical Care AG ADRTqttThffpg$12.2 Bil
BDUUY
Bangkok Dusit Medical Services PCL ADRDwf$12.0 Bil
DVA
DaVita IncQyglxldjqJwzgm$11.6 Bil
UHS
Universal Health Services Inc Class BFxrzp$10.8 Bil
THC
Tenet Healthcare CorpZmrrnrxkyGxjl$9.4 Bil
AMN
AMN Healthcare Services IncBtzkcnnyMyctsl$2.1 Bil

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