Fresenius Medical Care stock: This looks good.

Last Updated: 20. Februar 2024By

The Fresenius Medical Care share (FMC share) initially rose significantly after the presentation of very good business figures including outlook, but was unable to hold onto the price increase. Overall, the stock, which is currently trading just below the 40 euro mark in morning trading today (as of February 20, 2024, around 10 a.m.), looks better than in the past few months.

FMC subsidiary Fresenius Medical Care exceeded expectations in the 2023 financial year and is now also optimistic about the current year. Investors are also pleased with a slightly increased dividend – there are indeed opportunities for the Fresenius Medical Care share. However, whether the dialysis specialist can also maintain its position in the long term remains unclear due to new treatment options.

Fresh numbers from FMC The cost-cutting measures at Fresenius Medical Care are now paying off: With 19.45 billion euros, sales in the 2023 financial year increased by 5 percent in terms of currency. The operating result even climbed by 15 percent to 1.74 billion euros compared to 2022, adjusted for special effects – the company had only expected an increase of between 12 and 14 percent.

The outlook for FMC is also optimistic. While sales in 2024 are expected to grow in the low to mid-single-digit percentage range, the operating result is forecast to increase „in the mid to high teens“. Fresenius Medical Care also confirmed the medium-term target of an operating margin of 10 to 14 percent by 2025.

Fresenius Medical Care share – opportunities and risks After the decline in profits in 2022, the Fresenius Medical Care share had lost quite a bit and was only able to partially recover in the past year on the stock market. However, the cost-cutting program has put the Fresenius subsidiary back on the growth track. If the positive trend continues, there are also opportunities for the FMC share. Investors are also pleased with the increased dividend – from 1.12 euros to 1.19 euros per share.

However, as a dialysis specialist and leading provider of dialysis devices, FMC is also active in a dynamic environment. On the one hand, there are estimates that demand for treatments with dialysis devices will increase significantly in the coming years. On the other hand, several drugs are currently being researched that can be used for kidney disease.

These could make dialysis unnecessary in many cases or, if necessary, only necessary for severe cases. In medicine, fortunately for millions of patients, a lot is happening and it is currently difficult to predict how the market for dialysis devices, for example, will develop in the long term. The research success of Novo Nordisk from last fall is an example of this. Investors should not draw any hasty conclusions from this, but keep it in mind.