SCHOTT PHARMA (+) : Q2 Postview: More positive than meets the eye

研报英文原文证据摘录

SCHOTT PHARMA (+) : Q2 Postview: More positive than meets the eye

Refinitiv

Investment case, valuation and risks

SCHOTT Pharma (Outperform, Target Price EUR20)

Investment case

SCHOTT Pharma is a pure play on the fast-growing injectable drug containment and

delivery solutions market, boasting market-leading positions across ampoules, vials

and syringes. Like its peers, the company is well positioned to benefit from the rapidly

increasing demand for HVS products, resulting in sustainable sales and earnings

growth. Since IPO, the shares have been burdened by headwinds in its mRNA-

related Polymer syringe business and core vials destocking. With mRNA now <5% of

FY25E sales (vs c10% PY) and GLP-1/ADC-driven growth taking the front seat, we

think the group is close to the beginning of an upgrade cycle. We expect improving

delivery to help narrow Schott's c40% 26E EV/EBITA discount to peers.

Valuation methodology

We value SCHOTT Pharma based on an average of DCF and peer multiple approach.

Risks

To the upside:

Risks to the upside include (but are not limited to): stronger-than-expected revenue

growth as a result of demand for products due to increase in GLP-1 and/or mRNA drug

production; margin improvement acceleration due to faster-than-expected increase in

revenue coming from HVS products.

To the downside:

Risks to the downside include (but are not limited to): destocking impact lasting longer

than expected producing volatility; slower-than-expected pickup of revenue coming

from HVS products resulting in delayed margin expansion; slower-than-expected

uptake of GLP-1 and mRNA therapies impacting revenues recognition from contracts

signed with customers; limited demand for polymer PFS going forward as mRNA drug

producers increasingly shift to refrigerator stable formulations.