Avantor hits 2-year low after earnings forecast drives downgrade (NYSE:AVTR)

Forward (NYSE: AVTR) on Wednesday hit a two-year low of $23.44 per share, a day after the medical equipment maker fell 8.9% in response to management’s new earnings forecast. Cowen downgraded Avantor to Market Perform from Outperform and lowered its profit estimates.

Avantor on Monday cut its third-quarter forecast for total net sales of recent acquisitions to $400 million from $450 million, a difference of 11%. The update includes currency effects, COVID-related hurdles, supply chain constraints and slowing demand in Europe for industrial applications.

“Management and IR are to be commended for getting bad news out quickly; the announcement came right after their August trade update,” Dan Brennan, an analyst at Cowen, said in a Sept. 14 report. “However, the drop in the M&A guide and new comments on the risk of weaker demand at 2H increase the execution overhang, adding time to restore investor confidence, ultimately weighing on the stock.”

Avantor’s acquisitions over the past two years include RIM Bio, Ritter and Masterflex. In its second-quarter earnings call in July, Avantor cut its revenue forecast for acquisitions to $450 million from $500 million due to lower COVID-related revenue for Ritter and industry constraints. supply chain with MasterFlex.

Avantor on Wednesday slid 0.8% to $23.54 per share at 1:02 p.m. ET. It is down about 42% this year, compared to an 18% decline for the S&P 500 (SP500) stock index.

Cowen Estimates for Avantor (AVTR) – September 14
PES New old
2022 $1.44 $1.45
2023 $1.57 $1.63
Turnover (millions)
2022 $7,608 $7,675
2023 $7,691 $7,832

Seeking Alpha contributor Hummingbird Insights has a Buy rating on Avantor (AVTR) due to its free cash flow performance. Contributor JR Research rates Avantor (AVTR) as a Buy due to its pricing power and cash flow.