Diasorin falls back to 2017 levels after accounts and revised guidance

(Il Sole 24 Ore Radiocor) - Ugly slide for Diasorin in the aftermath of lower-than-expected quarterly results and a significant reduction in guidance, which led to a revision of estimates for leading brokers. The stock plunged to the bottom of the Milan list and briefly fell below the EUR 64 mark, a level it has not seen since April 2017. Estimates for 2025 see turnover (net of Covid turnover) up 5% at constant exchange rates, from +8% previously, while including Covid turnover overall growth is forecast at +4% (from +7%). The adjusted ebitda margin is expected to be around 33% (from around 34% previously).

Analysts at Deutsche Bank (buy with €109 target price) call the magnitude of the 2025 guidance revision 'surprising, with only one quarter to go. The quarter's numbers, says Deutsche Bank, fell short of estimates by '3% on sales, 8% on adjusted EBITDA and 5% on adjusted net income'. Analysts at Jp Morgan, after the quarterly report, reduced their target price on the stock to EUR 68, while Intermonte reduced its target price from EUR 89 to EUR 82, confirming its neutral rating. Results were 'weaker than expected, with revenues and adjusted ebitda 5% and 12% below our and consensus estimates respectively'. The company saw a quarterly slowdown at constant exchange rates 'across all major divisions' with the addition of 'further headwinds related to exchange rates'.

Analysts point out that 'some unfavourable elements were already known from the first half-year, such as the difficulties in the Chinese market, the persistent weakness in the licensed technologies division (-15% in the Life Science segment, with no signs of stabilisation yet), and the expected decline in Covid tests'. There was also a decline in test volumes in the MolecularDX division, linked to the delayed start of the respiratory season. In addition, US tariffs and an unfavourable sales mix weighed on profitability. Intermonte aligns its estimates with the new outlook, with a reduction in eps of around 6% for 2025 and 8-10% for the following two years. Equita also cuts its estimates for sales by 3%-4% and adjusted ebitda by 10%-11% and expects a similar consensus revision. The target price is reduced by 19% to EUR 96, but the rating remains buy.

"The stock came in weak to results and has performed poorly since the start of the year (-25% since the start of the year), but the results and guidance cut are disappointing and we therefore expect a significant negative stock reaction today," analysts say. "We believe," they add, "that 2026 may show a re-acceleration of the business with the full availability of new products and the fading of some headwinds that have impacted this year. A return to mid-to-high single digit growth is clearly not a foregone conclusion at current valuations'.