On Thursday, HSBC (LON:HSBA) lowered its rating on DiaSorin SpA (DIA:IM) (OTC: DSRLF) from "Buy" to "Hold" and reduced its price target from €110.00 to €105.00. The adjustment follows an assessment of the company's growth prospects and current share price valuation.
The firm noted that DiaSorin's growth narrative is centered around the period from 2025 to 2027, anticipating revenue boosts from new test and platform launches, including the NES expected in 2025, as well as synergies and cross-selling benefits from its acquisition of Luminex (NASDAQ:LMNX). However, it was indicated that these potential growth factors seem to be already accounted for in the company's current stock price.
DiaSorin's LIAISON PLEX, which offers flexible pricing and an attractive proposition to customers, faces the challenge of converting existing Verigene customers to PLEX. Additionally, the company is up against stiff competition from a market leader with a larger installed base, which could lead to slower growth than anticipated.
The analyst also pointed out potential risks to DiaSorin's profit margins. If the expected volumes of new products do not materialize swiftly, the company could face margin pressures, particularly as it may incur higher operating expenses and confront increased competition and regulatory challenges in China.
Moreover, MeMed, another significant potential growth avenue for DiaSorin, is currently in negotiations for reimbursements. The outcome of these negotiations, along with the results of the Jupiter study expected in the first half of 2025, could influence the company's performance and valuation.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.