First Berlin Equity Research has published a research update on M1 Kliniken AG (ISIN: DE000A0STSQ8). Analyst Ellis Acklin reiterated his BUY rating and decreased the price target from EUR 11.10 to EUR 10.50.
Preliminary 2022 results showed good profitability, thanks to solid contributions from M1 Beauty and Haemato AG. But the numbers were off last year’s pace, due to the absence of the corona test-kit business, which boosted 2021 Trade segment results. The Beauty segment racked up €60m in sales (+14% Y/Y) and notched a 190 basis point increase in the operating margin to 11.7%. Group revenues (€285m) and EBIT (€9.3m) matched FBe, while pre-tax earnings (€10.2m) overshot our target. Clinic expansions remain on track, while momentum for the injectables business remains strong. M1 also announced a 1.5m share buy-back to commence on 28 April. We have adjusted our forecasts to account for the increase in the mandatory discount rate for pharmaceuticals in 2023 to 12% (old: 7%) and also upped the risk free rate in our DCF model to 2.4% (old: 1.3%). We remain Buy-rated on M1 with a €10.5 TP (old: €11.1).