Amplifon on the rise, Barclays estimates Q1 margin increase

(Il Sole 24 Ore Radiocor) - Amplifon recovered from its recent lows in Piazza Affari. The stock ended the session up 3.18% at €9.21, boosted by Barclays' estimates of margin growth in the first quarter of the year, despite essentially flat organic growth. The company's stock recovered from its mid-March lows, when it touched EUR 7.8 per share. Competitors on other Old Continent markets also performed well, with Demant and Gn Store Nord in Copenhagen, and Sonova in Zurich. Overall, Goldman Sachs sees good performance prospects for the European hearing aid sector.

As for Amplifon, Barclays sees a "modest start to the year", with organic growth in the first quarter "essentially flat". However, it points out, margins should improve thanks to portfolio reorganisation measures and the Fit4Growth programme, although the retail market environment is not very dynamic". In any case, the risk associated with the integration of Gn, the high level of debt and the uncertainty surrounding the raising of capital lead to a 'wait-and-see' attitude.

In detail, Amplifon will publish its first quarter 2026 results on 5 May, from which we expect a muted start to the year, with organic sales essentially stable in the first quarter, a seasonally weaker period, probably penalised by a lacklustre market environment. According to experts, therefore, investors' attention should remain focused on market conditions and any early signs of recovery, as well as Amplifon's relative performance. France should provide some support, with market data indicating positive momentum since the beginning of the year at +11%, although growth moderated in February to +5.9% (compared to +15.7% in January and +17% in Q4 2025).

March data will be 'critical', Barclays points out, not least because it is seasonally the 'most important month for the hearing aid market in general within the quarter'. In light of all this, despite the weak revenue environment, analysts expect ebitda margin to expand by around 30 basis points in the first quarter, with margins expected to improve over the course of the year, buoyed by portfolio rationalisation (including the exit from the margin-diluting US managed care contract and the divestment of the UK business) and the benefits of the Fit4Growth programme beginning to materialise. That said, analysts reiterate the execution risk related to the Gn Hearing integration, "exacerbated by current operational difficulties in the retail channel, a weaker market environment, higher leverage and the potential uncertainty of a capital increase as reasons to remain at the window".

Ahead of the results season for hearing aid companies, Goldman Sachs also updated its estimates for the sector. While maintaining an "overall more cautious" view on the industry's growth rates, and despite moderate market growth, the analysts see an "attractive" risk/reward ratio for Demant (Buy), where an acceleration in organic revenue growth in the first quarter of 2026 and beyond is seen as "likely to result in upside to consensus estimates"; for Sonova (Neutral), a "more balanced" risk/reward ratio is seen, with many of the growth drivers in FY2026 unlikely to persist into 2027.