BIO: Compelling Asset Value Despite Near-Term Fundamental Headwinds; Resume Coverage at Outperform

研报英文原文证据摘录

BIO: Compelling Asset Value Despite Near-Term Fundamental Headwinds; Resume Coverage at Outperform

ose series. We believe Bio- All values in USD unless otherwise noted.

Rad's process chromatography sales are exposed to this product, and the Priced as of prior trading day's market close, EST (unless otherwise noted).

recommendation change is a key driver of the anticipated growth reversal

-- from >20% growth in 2025 to mid-teens decline in 2026. Bio-Rad laps

this headwind in 2027, which should support a recovery in sales growth

independent of any anticipated improvement in Tools end markets.

Near term mid-teens EBIT margin target signals significant business

retooling to come. Bio-Rad's CEO recently outlined a near-term mid-teens

EBIT margin target — up from the 11% guided midpoint for 2026 — which

we view as a strong signal of meaningful restructuring/retooling ahead. We

expect greater clarity on the path forward by early next year. Combined

with recent executive leadership changes (a new President/COO and CFO,

both joining in 2024), we see restructuring momentum and management

renewal as twin catalysts for the stock.

Increase in Sartorius optionality a near term event. The Sartorius Trust

-- required to own a controlling interest in the company for 30 years

-- terminates in mid-2028. The termination of the Trust should increase

the optionality of Bio-Rad's 33% stake and lessen the associated liquidity

discount. Undiscounted, the value of this stake comprises the majority of

Bio-Rad's market cap.

Even stingy multiple enables upside. Our $320 price target is based on

~9.5x our EBITDA estimate for the 12 months ending March-28. This

multiple is a steep 5.5x discount to Bio-Rad's peer group, which we believe

appropriate to reflect its more challenged growth prospects.