When Will Stevanato's Free Cash Flow Turn Positive? This Analyst Has An Answer

Stephens analyst Jacob Johnson initiated coverage on Stevanato Group SPA STVN at an Overweight rating with a price target of $33.

The analyst sees STVN as an industry leader in the glass containment solutions market and believes it benefits from growing biologics and injectables, driving demand for its solutions (including GLP-1s).

The analyst notes that the company targets a high single-digit growth rate to a low double-digit growth rate and thinks investment for capacity expansion would drive margins.

With increases in its High Value Solutions (HVS) mix shift, the analyst sees room for additional margin expansion as these revenues carry a 40%-70% margin. 

Johnson also sees improvement in FCF in FY24, which has been seeing a downward trend in recent years, and expects it to be positive in FY25.

For FY23, the analyst estimates revenue of €1,098.9 million (vs. consensus €1,099.7 million) and adjusted EPS of €0.61 (vs. consensus €0.60). 

Also, Johnson estimates revenue and adjusted EPS of €1,218.6 million (€1,221.6 million) and €0.68 (vs. €0.69 street view) for FY24.

Price Action: STVN shares are trading higher by 0.021% at $26.92 on the last check Tuesday.