We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
3 Reasons Why You Should Hold Avantor (AVTR) Stock for Now
Read MoreHide Full Article
Avantor, Inc. (AVTR - Free Report) is well-poised for growth in the coming quarters, courtesy of its strong product portfolio. The optimism led by solid first-quarter 2024 results and operational workflow also looks promising. However, headwinds resulting from the loss of a significant number of customers and forex volatility are major downsides.
Over the past year, this Zacks Rank #3 (Hold) stock has rallied 0.9% compared with the 4% rise of the industry and 27.1% growth of the S&P 500.
The renowned provider of mission-critical products and services has a market capitalization of $14.18 billion. The company projects 9.7% growth for the next five years and expects to witness continued improvements in its business. Avantor surpassed the Zacks Consensus Estimate in two of the trailing four quarters, missed the same in one and broke even once, delivering an earnings surprise of 5.1%, on average.
Image Source: Zacks Investment Research
Let’s delve deeper.
Operational Workflow: We are optimistic about Avantor’s more than 200 facilities strategically located worldwide, including manufacturing, distribution, service, research & technology and sales centers. The company operates more than 45 global manufacturing facilities, including 19 facilities that are current Good Manufacturing Practice (cGMP) compliant and have been registered with the FDA or comparable foreign regulatory authorities.
Product Portfolio: We are optimistic about Avantor’s portfolio, which includes a comprehensive range of products and services that allow it to create customized and integrated solutions for its customers. This month, the company launched two innovative products that together sustainably optimize the gene therapy harvest process — J.T.Baker Cell Lysis Solution and J.T.Baker Endonuclease.
Strong Q1 Results: Avantor’s management confirmed that in the first quarter of 2024, the company’s bioprocessing end market in Bioscience Production remained healthy with a robust pipeline of new therapies, a favorable regulatory landscape (including three new cell and gene therapy approvals in the quarter) and strong patient demand. AVTR also saw sequential improvement in its bioprocessing order rate.
Downsides
Loss of a Significant Number of Customers: Avantor’s operating results could be adversely affected by the loss of revenues from a significant number of its customers, including direct distributors and end users. If a significant number of customers purchase fewer of its products, defer orders or fail to place additional orders with the company, its sales could decline, and its operating results may not meet its expectations.
Forex Volatility: A substantial amount of Avantor’s revenues is derived from international operations. Avantor also anticipates that a significant portion of its sales will continue to come from international markets in the future. The revenues reported by Avantor with respect to its operations outside of the United States may be adversely affected by fluctuations in foreign currency exchange rates.
Estimate Trend
Avantor has been witnessing a flat estimate revision trend for 2024. Over the past 90 days, the Zacks Consensus Estimate for its earnings per share has remained stable at $1.01.
The Zacks Consensus Estimate for second-quarter 2024 revenues is pegged at $1.71 billion, which suggests a 2.2% decline from the year-ago reported number.
Key Picks
Some better-ranked stocks in the broader medical space are DaVita Inc. (DVA - Free Report) , Stryker Corporation (SYK - Free Report) and Ecolab Inc. (ECL - Free Report) .
DaVita, carrying a Zacks Rank #2 (Buy) at present, has an estimated long-term growth rate of 13.6%. DVA’s earnings surpassed estimates in each of the trailing four quarters, with the average surprise being 29.4%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
DaVita’s shares have gained 34.7% compared with the industry’s 9.6% rise in the past year.
Stryker, carrying a Zacks Rank of 2 at present, has an estimated long-term growth rate of 10.6%. SYK’s earnings surpassed estimates in each of the trailing four quarters, with the average being 4.9%.
Stryker has gained 13.2% against the industry’s 3.1% decline in the past year.
Ecolab, carrying a Zacks Rank of 2 at present, has an estimated long-term growth rate of 14.3%. ECL’s earnings surpassed estimates in each of the trailing four quarters, with the average surprise being 1.3%.
Ecolab’s shares have rallied 31.2% against the industry’s 13.8% decline in the past year.
Unique Zacks Analysis of Your Chosen Ticker
Pick one free report - opportunity may be withdrawn at any time
Image: Bigstock
3 Reasons Why You Should Hold Avantor (AVTR) Stock for Now
Avantor, Inc. (AVTR - Free Report) is well-poised for growth in the coming quarters, courtesy of its strong product portfolio. The optimism led by solid first-quarter 2024 results and operational workflow also looks promising. However, headwinds resulting from the loss of a significant number of customers and forex volatility are major downsides.
Over the past year, this Zacks Rank #3 (Hold) stock has rallied 0.9% compared with the 4% rise of the industry and 27.1% growth of the S&P 500.
The renowned provider of mission-critical products and services has a market capitalization of $14.18 billion. The company projects 9.7% growth for the next five years and expects to witness continued improvements in its business. Avantor surpassed the Zacks Consensus Estimate in two of the trailing four quarters, missed the same in one and broke even once, delivering an earnings surprise of 5.1%, on average.
Image Source: Zacks Investment Research
Let’s delve deeper.
Operational Workflow: We are optimistic about Avantor’s more than 200 facilities strategically located worldwide, including manufacturing, distribution, service, research & technology and sales centers. The company operates more than 45 global manufacturing facilities, including 19 facilities that are current Good Manufacturing Practice (cGMP) compliant and have been registered with the FDA or comparable foreign regulatory authorities.
Product Portfolio: We are optimistic about Avantor’s portfolio, which includes a comprehensive range of products and services that allow it to create customized and integrated solutions for its customers. This month, the company launched two innovative products that together sustainably optimize the gene therapy harvest process — J.T.Baker Cell Lysis Solution and J.T.Baker Endonuclease.
Strong Q1 Results: Avantor’s management confirmed that in the first quarter of 2024, the company’s bioprocessing end market in Bioscience Production remained healthy with a robust pipeline of new therapies, a favorable regulatory landscape (including three new cell and gene therapy approvals in the quarter) and strong patient demand. AVTR also saw sequential improvement in its bioprocessing order rate.
Downsides
Loss of a Significant Number of Customers: Avantor’s operating results could be adversely affected by the loss of revenues from a significant number of its customers, including direct distributors and end users. If a significant number of customers purchase fewer of its products, defer orders or fail to place additional orders with the company, its sales could decline, and its operating results may not meet its expectations.
Forex Volatility: A substantial amount of Avantor’s revenues is derived from international operations. Avantor also anticipates that a significant portion of its sales will continue to come from international markets in the future. The revenues reported by Avantor with respect to its operations outside of the United States may be adversely affected by fluctuations in foreign currency exchange rates.
Estimate Trend
Avantor has been witnessing a flat estimate revision trend for 2024. Over the past 90 days, the Zacks Consensus Estimate for its earnings per share has remained stable at $1.01.
The Zacks Consensus Estimate for second-quarter 2024 revenues is pegged at $1.71 billion, which suggests a 2.2% decline from the year-ago reported number.
Key Picks
Some better-ranked stocks in the broader medical space are DaVita Inc. (DVA - Free Report) , Stryker Corporation (SYK - Free Report) and Ecolab Inc. (ECL - Free Report) .
DaVita, carrying a Zacks Rank #2 (Buy) at present, has an estimated long-term growth rate of 13.6%. DVA’s earnings surpassed estimates in each of the trailing four quarters, with the average surprise being 29.4%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
DaVita’s shares have gained 34.7% compared with the industry’s 9.6% rise in the past year.
Stryker, carrying a Zacks Rank of 2 at present, has an estimated long-term growth rate of 10.6%. SYK’s earnings surpassed estimates in each of the trailing four quarters, with the average being 4.9%.
Stryker has gained 13.2% against the industry’s 3.1% decline in the past year.
Ecolab, carrying a Zacks Rank of 2 at present, has an estimated long-term growth rate of 14.3%. ECL’s earnings surpassed estimates in each of the trailing four quarters, with the average surprise being 1.3%.
Ecolab’s shares have rallied 31.2% against the industry’s 13.8% decline in the past year.