On Thursday, Deutsche Bank adjusted its price target for Tecan Group AG (SIX:TECN:SW) shares, a leader in laboratory instrumentation and solutions, reducing it to CHF350 from the previous CHF412. Despite the price target cut, the firm continues to recommend a Buy rating for the stock.
The revision follows Tecan's unexpected first half performance, which deviated sharply from its strong results in the second half of 2023. This discrepancy has raised concerns about the company's ability to meet its newly issued guidance for 2024, potentially shaking investor confidence.
According to the firm, Tecan has started to witness early signs of recovery in its core markets and remains optimistic about achieving its revised targets. The company is also expected to resume its medium-term growth trajectory by 2025, bolstered by factors such as the economic stimulus in China and its business dealings with Intuitive Surgical (NASDAQ:ISRG).
Despite the near-term challenges, Deutsche Bank believes that Tecan's long-term prospects are promising. The anticipated catalysts over the upcoming quarters, coupled with a valuation of 24 times the estimated 2025 earnings, present a strong investment case. The firm acknowledges that it may take time for the market to fully absorb and react to Tecan's recent performance.
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