Investment Thesis
Avantor (AVTR) is a misunderstood relative value play in the healthcare sector that now trades at a 50-60% discount (depending on which multiple) to its closest peer Thermo Fisher Scientific (TMO). It is down 54% from the 2/19 market peak versus 29% for the S&P 500 and only 10% for TMO.
Avantor’s underperformance has been dramatic, but in the absence of relevant news, few seem to understand why. I believe the underperformance is a mis-pricing driven by unwarranted concerns about Avantor’s ability to refinance debt and to meet long-term