Avantor (AVTR): Revisiting Valuation After Prolonged Share Price Weakness

Recent Stock Performance and Context

Avantor (AVTR) has been grinding lower, with the stock down about 2% on the day and roughly 17% over the past 3 months, extending a much longer slide.

See our latest analysis for Avantor.

The latest pullback leaves Avantor’s share price at $10.71, and that weak near term share price return sits on top of a much steeper year to date share price decline. This suggests momentum is still fading as investors reassess growth versus execution risk.

If you are weighing how to respond to this kind of drawn out weakness, it might help to compare Avantor with other healthcare names using healthcare stocks.

With shares sliding and now trading at a discount to analyst targets and some measures of intrinsic value, investors face a key question: is Avantor genuinely undervalued or is the market correctly pricing in muted future growth?

Most Popular Narrative: 21.5% Undervalued

With Avantor last closing at $10.71 versus a narrative fair value of $13.64, the gap suggests investors and forecasters see very different futures for this business.

The analysts have a consensus price target of $14.118 for Avantor based on their expectations of its future earnings growth, profit margins and other risk factors. However, there is a degree of disagreement amongst analysts, with the most bullish reporting a price target of $19.0, and the most bearish reporting a price target of just $12.0.

Read the complete narrative.

Want to see why modest revenue growth, shifting margins and a higher future earnings multiple still add up to upside from here? The narrative explains the full valuation playbook without holding back on the core assumptions. It also keeps the most surprising trade off between growth and profitability for those who read it in full.

Result: Fair Value of $13.64 (UNDERVALUED)

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

However, lingering execution missteps and prolonged bioprocessing softness could undermine margin recovery and challenge the case for a near term valuation rebound.

Find out about the key risks to this Avantor narrative.

Build Your Own Avantor Narrative

If you are not fully convinced by this view, or prefer hands on research, you can build a personalised, scenario-driven story in minutes: Do it your way.

A great starting point for your Avantor research is our analysis highlighting 4 key rewards and 1 important warning sign 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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