Sartorius Earnings: While Headwinds Still Present, Demand Recovery Begins Slowly

Sartorius AG and Sartorius Stedim Biotech’s third-quarter 2023 results were largely in line with expectations, and we are making no changes to our fair value estimates. Shares for both wide-moat companies currently look slightly undervalued, after falling due to last week’s update on preliminary third-quarter results and lowered full-year guidance. We believe it may be a good opportunity for investors to obtain shares at a discounted price, given that Sartorius reported seeing signs of recovery late in the third quarter. Order intake started improving toward the end of the third quarter, suggesting declines hit a floor in the second quarter and showed signs of recovery in the bioprocessing business, albeit at a slow pace. Shares are up slightly on these trends. However, uncertainty from macroeconomic and geopolitical factors remains elevated, and a full recovery in demand may be gradual heading into 2024.