Last Update 10 Jan 26

Fair value Increased 3.77%

ERF: Mixed Price Views And New Testing Capacity Will Shape Future Performance

Analysts have nudged their price target higher to about €66 from about €64, reflecting updated assumptions around fair value, discount rate, revenue growth, profit margin, and future P/E that align with recent mixed Street target moves between €60 and €63.50.

Analyst Commentary

Recent Street updates on Eurofins Scientific offer a mixed picture, with one price target moving higher and another moving lower, but both clustered in the low €60s. For you as an investor, the key takeaway is that analysts appear to be reassessing the balance between valuation and execution rather than shifting to an outright positive or negative view.

Bullish Takeaways

Bullish analysts lifting targets toward €60 suggest they see the current share price as broadly supported by their fair value work, even with conservative assumptions.
The move up from a prior €53 target points to increased confidence in the company’s ability to deliver on its revenue and profit margin assumptions used in their models.
Keeping ratings anchored around Hold or Neutral while moving targets higher indicates that, in their view, downside risk may be more limited than before, even if they are not ready to call the shares clearly undervalued.

Bearish Takeaways

The reduction in a separate target to €63.50 from €66 shows that some bearish analysts are trimming expectations, suggesting less headroom to the upside versus earlier models.
A Neutral stance alongside a lower target signals caution around execution or earnings visibility, with analysts reluctant to endorse a more aggressive growth or margin path.
The tight range of targets between about €60 and €63.50 highlights a view that the current valuation already bakes in much of the expected operational performance, leaving limited room for disappointment.
With ratings not shifting to Buy, the cautious camp appears focused on the risk that any miss against their revenue, margin or P/E assumptions could pressure the shares relative to these target levels.

What's in the News

Eurofins Consumer Product Testing Vietnam has completed a major expansion, moving into a purpose-built 7,000 sq. m laboratory in Ho Chi Minh City that provides more than two and a half times the floor space of its previous site. This supports Vietnam's growing role as a global manufacturing hub and sustained business growth in the region (Key Developments).
The new Vietnam facility is positioned to strengthen Eurofins Consumer Product Testing network capabilities for brands and manufacturers in the US, Europe and other regions that rely on Vietnam within international supply chains (Key Developments).
Eurofins Medical Device Services North America has launched a GMP PFAS testing and screening solution, described as the first developed and commercialized specifically for the medical device industry. It is aimed at helping manufacturers address complex and evolving global PFAS regulations (Key Developments).
The PFAS testing offering, including advanced PFAS Risk Assessments for medical devices, is intended to support medical device and patient safety and to help manufacturers manage potential regulatory updates. It is also designed to reduce the risk of future shutdowns, recalls and liability issues while supporting sustainability goals (Key Developments).

Valuation Changes

Fair Value moved from about €63.93 to about €66.34, suggesting a modest upward adjustment in the modelled estimate.
Discount Rate increased slightly from about 6.23% to about 6.87%, implying a somewhat higher required return in the updated assumptions.
Revenue Growth was adjusted down from about 7.15% to about 6.46%, pointing to a more measured outlook in the forecast inputs.
Net Profit Margin edged up from about 8.49% to about 9.03%, reflecting slightly higher profitability assumptions in the revised model.
Future P/E moved marginally from about 15.72x to about 15.92x, indicating only a small change in the valuation multiple used for the outer year.

Investments in automation, digitalization, and acquisitions will enhance efficiency, productivity, and margins, while unlocking new growth opportunities.
Heightened regulatory standards and demographic trends are supporting stable, resilient demand across core testing and diagnostics services.
Structural challenges in key segments, integration risks from acquisitions, high capital expenditure, limited pricing power, and aggressive expansion strategy threaten margins, growth, and profitability.

Catalysts

About Eurofins Scientific

Provides various analytical testing and laboratory services worldwide.What are the underlying business or industry changes driving this perspective?

The company's significant investments in automation, digitalization, and its hub-and-spoke laboratory infrastructure are expected to materially improve operating efficiency and scalability by 2027. These measures should drive enhanced net margins and earnings growth as operational costs decrease and productivity improves.
Eurofins is benefitting from increasing global regulatory standards in food, environmental, and pharmaceutical testing, supporting structurally higher and more resilient demand for its core services. This underpins a stable and expanding revenue base, which the market may be undervaluing given current pricing.
The ongoing wave of aging populations and the rise of chronic diseases worldwide is leading to robust long-term demand for diagnostics and pharmaceutical R&D, areas where Eurofins' specialized services are positioned to capture incremental growth and revenue acceleration in the coming years.
Strategic acquisitions in targeted niches-often at favorable valuations-are expected to unlock cross-selling synergies and margin uplift following integration, particularly as underperforming acquired assets (like SYNLAB Spain) are turned around by 2027, driving both revenue growth and higher group margins.
The company anticipates a normalization and rebound in weaker verticals such as biopharma and certain genomics segments, where temporary headwinds and restructuring are currently weighing down results; the removal of these one-off drags provides a clear pathway for both renewed revenue growth and margin expansion.

Eurofins Scientific Earnings and Revenue Growth

Eurofins Scientific Future Earnings and Revenue Growth

Assumptions

How have these above catalysts been quantified?

Analysts are assuming Eurofins Scientific's revenue will grow by 7.1% annually over the next 3 years.
Analysts assume that profit margins will increase from 5.3% today to 8.5% in 3 years time.
Analysts expect earnings to reach €745.8 million (and earnings per share of €3.94) by about September 2028, up from €380.9 million today. However, there is a considerable amount of disagreement amongst the analysts with the most bullish expecting €828 million in earnings, and the most bearish expecting €610 million.
In order for the above numbers to justify the analysts price target, the company would need to trade at a PE ratio of 15.7x on those 2028 earnings, down from 29.3x today. This future PE is lower than the current PE for the GB Life Sciences industry at 29.3x.
Analysts expect the number of shares outstanding to decline by 4.76% per year for the next 3 years.
To value all of this in today's terms, we will use a discount rate of 6.23%, as per the Simply Wall St company report.

Eurofins Scientific Future Earnings Per Share Growth

Risks

What could happen that would invalidate this narrative?

Eurofins continues to experience structural challenges in biopharma and genomics, with certain segments (discovery/genomics and ancillaries) showing negative growth and being impacted by cuts in academic and research budgets (especially in the US); this creates a drag on overall revenue growth and makes the group's medium-term organic growth targets more difficult to achieve if not reversed.
The acquisition and integration of loss-making businesses such as SYNLAB Spain is currently dilutive to group margins (20bps H1, expected 60bps for FY), and restructuring costs, duplication, and operational inefficiencies pose further risk to net margins and overall earnings if synergy extraction does not materialize as planned.
Eurofins' heavy capital expenditure (notably on real estate and digitalization) is absorbing significant cash flow, and if these investments fail to yield expected efficiency or revenue gains by 2027, this could depress free cash flow and constrain further shareholder returns (such as buybacks or increased dividends).
Pricing power is not fully embedded across all verticals; while inflation is assumed in long-term growth targets, there is still limited visibility and capability to pass on cost increases systematically, especially with long-term contracts-this may hinder margin expansion and earnings if inflation remains elevated or customer bargaining power consolidates.
The group's aggressive acquisition-driven growth strategy, coupled with ongoing site rationalization and the need to integrate diverse IT and operational systems, increases risks of execution missteps, integration delays, or cultural challenges, which could negatively impact organic growth, operational efficiency, and ultimately, profitability over time.

Valuation

How have all the factors above been brought together to estimate a fair value?

The analysts have a consensus price target of €63.931 for Eurofins Scientific based on their expectations of its future earnings growth, profit margins and other risk factors. However, there is a degree of disagreement amongst analysts, with the most bullish reporting a price target of €95.0, and the most bearish reporting a price target of just €46.0.
In order for you to agree with the analyst's consensus, you'd need to believe that by 2028, revenues will be €8.8 billion, earnings will come to €745.8 million, and it would be trading on a PE ratio of 15.7x, assuming you use a discount rate of 6.2%.
Given the current share price of €62.86, the analyst price target of €63.93 is 1.7% higher. The relatively low difference between the current share price and the analyst consensus price target indicates that they believe on average, the company is fairly priced.
We always encourage you to reach your own conclusions though. So sense check these analyst numbers against your own assumptions and expectations based on your understanding of the business and what you believe is probable.

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Disclaimer

AnalystConsensusTarget is a tool utilizing a Large Language Model (LLM) that ingests data on consensus price targets, forecasted revenue and earnings figures, as well as the transcripts of earnings calls to produce qualitative analysis. The narratives produced by AnalystConsensusTarget are general in nature and are based solely on analyst data and publicly-available material published by the respective companies. These scenarios are not indicative of the company's future performance and are exploratory in nature. Simply Wall St has no position in the company(s) mentioned. Simply Wall St may provide the securities issuer or related entities with website advertising services for a fee, on an arm's length basis. These relationships have no impact on the way we conduct our business, the content we host, or how our content is served to users. The price targets and estimates used are consensus data, and do not constitute a recommendation to buy or sell any stock, and they do not take account of your objectives, or your financial situation. Note that AnalystConsensusTarget's analysis may not factor in the latest price-sensitive company announcements or qualitative material.

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