Fagron: Recent Capital Markets Day Confirms Upside Potential

2025-05-09 10:30:00 ET

Summary

• Fagron, a Belgian pharmaceutical compounding leader, has resolved previous market concerns and provided optimistic 2025-2030 guidance, projecting significant revenue and margin growth.
• The company expects high single to low double-digit organic revenue growth and improved margins, maintaining leverage ratios within a 2.8-3.5 times EBITDA range.
• Two scenarios project 2024-2030 revenue growth of 7.5% and 11%, leading to potential REBITDA of 293M EUR and 350M EUR, respectively.
• Applying a 12-14 earnings multiple, Fagron's fair value could reach 28-41 EUR by 2030, suggesting a current fair value of 26.2 EUR, 22% above the current price.

Introduction

Back in January I argued there was a new investment opportunity in Fagron ( OTCPK:ARSUF ), a Belgian company and a leader in pharmaceutical compounding. The market was a bit nervous after the company received a warning letter from the FDA , but that situation has now been resolved (subject to a final physical inspection of the facility). Fagron hosted a capital markets day last month where it published its guidance for the 2025-2030 era. That guidance included some important elements, and this allowed me to run the numbers based on two scenarios. ...

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