Fresenius Medical Care (XTRA:FME): Assessing Valuation After Recent Share Price Slowdown

Fresenius Medical Care (XTRA:FME) has been drifting quietly in recent weeks, but the stock’s mixed performance this year sets up an interesting question for investors: how do its improving profits square with the weaker share price?

See our latest analysis for Fresenius Medical Care.

Despite a softer 90 day share price return of 6.89 percent and a year to date share price return of 7.47 percent, Fresenius Medical Care’s improving fundamentals and solid three year total shareholder return of 49.50 percent suggest the longer term recovery story is still intact, even if near term momentum has cooled around the recent 40.28 dollars level.

If this kind of steady turnaround interests you, it is worth seeing what else is happening across European healthcare by exploring healthcare stocks.

With earnings momentum improving and the shares trading at a discount to analyst targets, is Fresenius Medical Care quietly undervalued here, or are markets already correctly pricing in the company’s next leg of growth?

Most Popular Narrative Narrative: 15% Undervalued

Fresenius Medical Care’s fair value in the most followed narrative sits meaningfully above the recent €40.28 close, framing a potential disconnect between fundamentals and price.

The analysts are assuming Fresenius Medical Care's revenue will grow by 3.6% annually over the next 3 years. Analysts assume that profit margins will increase from 3.4% today to 6.2% in 3 years time.

Read the complete narrative.

Curious how modest growth assumptions and a step change in profitability can still justify a higher valuation multiple than today? Want to see the exact earnings path, margin lift and valuation bridge behind that target price? The full narrative reveals the numbers that make this upside case hang together.

Result: Fair Value of $47.41 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, elevated U.S. dialysis mortality and ongoing margin dilution in value based care could stall treatment growth and blunt the profit recovery story.

Find out about the key risks to this Fresenius Medical Care narrative.

Build Your Own Fresenius Medical Care Narrative

If you see the story differently, or would rather dig into the numbers yourself, you can shape a fresh view in minutes with Do it your way.

A great starting point for your Fresenius Medical Care research is our analysis highlighting 5 key rewards and 2 important warning signs that could impact your investment decision.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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