FRANKFURT (dpa-AFX) - Following the sharp fall in Evotec's share price since the beginning of the year, its valuation is attractive again, according to Deutsche Bank. The disappointment over the departure of CEO Werner Lanthaler seems to have subsided, wrote analyst Falko Friedrichs in a study published on Friday and upgraded the shares of the pharmaceutical drug researcher from "Hold" to "Buy". At the same time, he cut the price target from 20 to 19 euros, which still means upside potential of currently 35 percent.

According to Friedrichs, the results of the MDax company Evotec should grow strongly in the current year and again in the future. The market environment for contract research organizations (CRO) and contract development organizations and service providers (CDMO) is brightening, the expert wrote. He also expects the gap left by CEO Lanthaler's surprising departure at the beginning of January to be filled shortly.

After almost 15 years as CEO of Evotec, Lanthaler resigned for personal reasons. He had justified his move by saying that 2023 had been "extremely challenging and exhausting both physically and overall". Investors reacted with uncertainty. As a result, the share price plummeted, reaching its lowest point to date at just over EUR 12.60 in mid-March.

Friedrichs now believes that the investor jitters have been overcome and also expects a strong increase in earnings for 2024. According to him, the operating result adjusted for the headwind from the cyberattack should increase by 25 percent compared to 2023. "After several years without significant earnings growth, as sales growth was fully reinvested, this should represent a significant change," explained the Deutsche Bank expert.

The fact that Evotec's earnings target for 2025 of more than EUR 300 million is hardly achievable and should therefore be lowered should come as no surprise to anyone, he added. Both the average analyst estimate and his own are already significantly lower at around EUR 245 million. However, Friedrichs believes that the sales forecast of more than one billion euros is achievable.

With a "buy" rating, Deutsche Bank recommends buying the share on the basis of the expected total return for the next twelve months./ck/mis/stk

Analyzing institute Deutsche Bank.