AVTR - Avantor hits 2-year low after revenue guidance spurs downgrade

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

Avantor on Monday updated its third-quarter guidance for total net sales from recent acquisitions to $400 million from $450 million -- an 11% difference. The update includes the effects of foreign exchange, COVID hurdles, supply-chain constraints and softening demand in Europe for industrial applications.

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

Avantor’s acquisitions in the past couple of years include RIM Bio, Ritter and Masterflex. During its second-quarter earnings call , Avantor in July cut revenue guidance for the acquisitions to $450 million from $500 million because of a decline in COVID-related revenue for Ritter and supply-chain constraints with MasterFlex.

Avantor on Wednesday slipped 0.8% to $23.54 a share at 1:02 p.m. ET.

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