Avantor (AVTR) will face challenges in its primary markets and potential declines in channel shares in 2025, while its advantages including reduced exposure to the Chinese market and minimal reliance on instrument sales may diminish, UBS Securities said in a note on Friday.
The traditional strategy of mergers and acquisitions to boost growth is becoming less viable for Avantor due to rising target valuations and increased interest rates, and the company may find it difficult to pursue inorganic growth opportunities effectively, the firm added.
UBS said that despite optimism about a rebound in bioprocessing demand in 2025, Avantor's strengths lie more in-process materials and formulation chemicals, rather than in areas like downstream filtration, purification, and single-use consumables, where the most significant demand increases are expected.
The brokerage downgraded its rating on Avantor's stock to neutral from buy and decreased the price target to $25 from $29.
Price: 21.93, Change: -0.65, Percent Change: -2.86
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