A Look at Gerresheimer (XTRA:GXI) Valuation After FDA Approval of New On-Body Drug Delivery Device

Gerresheimer (XTRA:GXI) shares drew renewed attention after news that the US FDA approved the Lasix ONYU combination product, which features the company’s proprietary on-body drug delivery device. This regulatory win could prove commercially meaningful with 2025 launches approaching.

See our latest analysis for Gerresheimer.

Despite the lift from FDA approval of its new drug delivery device, Gerresheimer's share price has continued to face heavy pressure, with a 30-day share price return of -40% and a total return over the last year of -69%. While the recent breakthrough signals innovation and potential for long-term commercial gains, the market’s cautious stance reflects persistent concerns about near-term earnings and guidance revisions. Momentum remains weak for now, but the longer-term prospects may be starting to shift as new innovations come to market.

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With shares now trading at a significant discount to analyst targets and recent innovation boosting Gerresheimer’s longer-term prospects, investors may wonder if the market is overlooking potential upside or if every bit of future growth is already accounted for in the price.

Most Popular Narrative: 52.7% Undervalued

With the most closely followed analyst projections putting fair value at €56.36 versus Gerresheimer’s last close price of €26.64, the current market discount is substantial and hinges on whether key anticipated changes deliver in practice.

The anticipated organic growth rate of 3% to 5% in 2025, driven by new product lines, a shift towards high-value products, and normalization of operations at facilities affected by prior disruptions, is poised to positively impact Gerresheimer's revenue and profitability.

Read the complete narrative.

Curious what fuels such a bold valuation gap? The narrative factors in aggressive revenue streams and a dramatic margin boost, all based on expansion and turnaround hopes. What exact uplift in profitability, and just how optimistic are the growth projections? Peek inside to see the core assumptions and surprising optimism behind this standout fair value call.

Result: Fair Value of €56.36 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, significant integration risks following the Bormioli Pharma acquisition, as well as pronounced cash flow seasonality, could limit Gerresheimer's progress if not managed carefully.

Find out about the key risks to this Gerresheimer narrative.

Another View: SWS DCF Model Suggests Even More Upside

Looking at Gerresheimer through the lens of our DCF model reveals an even larger disconnect. The SWS DCF estimate puts fair value at €84.77, which is much higher than both the market price and analyst targets. This suggests the shares could be deeply undervalued if the underlying cash flow projections hold true. But are such expectations realistic, or is the market seeing risks ahead that the model cannot?

Look into how the SWS DCF model arrives at its fair value.

Build Your Own Gerresheimer Narrative

If you see things differently or want to dive deeper, you can quickly shape your own perspective and narrative using the available data. It takes less than three minutes. Do it your way

A great starting point for your Gerresheimer research is our analysis highlighting 2 key rewards and 4 important warning signs that could impact your investment decision.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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