How Analysts View Fresenius Medical Care and Its Peers in August 2017


Aug. 17 2017, Updated 7:37 a.m. ET

Growth trends in 1H17

At the end of 2Q17, Fresenius Medical Care (FMS) operated 3,690 dialysis clinics around the world, which represents year-over-year (or YoY) growth of 5%. The company treated a total of 315,305 patients while its workforce strength reached 112,163 at the end of 2Q17.

In 1H17, Fresenius Medical Care reported revenues close to 9.0 billion euros, which represents 14% YoY growth on a reported basis and 11% YoY growth on a constant currency basis.

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On January 31, 2017, Fresenius Medical Care announced that it had entered into an agreement with the US Department of Veterans Affairs and the Department of Justice. This agreement would allow the company to receive reimbursement for services dispensed to US military veterans from January 2009 to February 15, 2011.

Excluding the revenue impact of this one-time event, Fresenius Medical Care reported revenues close to 8.9 billion euros in 1H17. This represents YoY growth of 12% on a reported basis and a 9% YoY rise on a constant currency basis.

In 1H17, Fresenius Medical Care also reported earnings before interest and tax (or EBIT) of 1.2 billion euros, which represents 16% YoY growth on a reported basis and 13% YoY growth on a constant currency basis. Excluding the impact of the Department of Veterans Affairs (or VA) agreement, the company’s EBIT in 1H17 was 1.1 billion euros for YoY growth of 7% on a reported basis and 5% YoY growth on a constant currency basis.

If Fresenius Medical Care demonstrates these robust growth trends in 2H17, it may have a favorable impact on the company’s stock price as well as the Vanguard FTSE Developed Markets ETF (VEA). Fresenius Medical Care accounts for 0.05% of VEA’s total portfolio holdings.

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Analysts’ recommendations for Fresenius Medical Care

Of the four analysts covering Fresenius Medical Care in August 2017, two rated the company a “strong buy,” one rated it a “buy,” and one rated it a “hold.”

Peer ratings in August 2017

Of the 13 analysts covering DaVita (DVA) in August 2017, ~15.4% rated the company a “buy.” Approximately 65.0% of the 20 analysts covering Laboratory Corporation of America Holdings (LH) gave it a “buy” recommendation, and 33.3% of the 21 analysts covering Quest Diagnostics (DGX) rated it a “buy.”

In the next part, we’ll look at Fresenius Medical Care’s revenue growth prospects.


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