Deutsche raises its valuation of Grifols by 20% after Vertex fiasco

Grifols shares received the fiasco in its biggest threat on Friday with final gains of 8.5%. Deutsche Bank analysts reacted today with a much stronger valuation upgrade of 20%.

Firms such as Citigroup and JPMorgan were already very positive last Friday on news from the United States that dashed Vertex’s hopes of stealing market share from Grifols with a new plasma technology.

Citi analysts stressed that with the Vertex fiasco the Ibex company «eliminates the biggest latent threat» to its business, directly affecting 15% of the group’s total sales, and JPMorgan analysts acknowledged that they had previously pointed to Vertex’s compound as a potential competitive threat to Grifols’ Prolastin.

These messages opened the door to further upward revisions to Grifols’ valuation, and these upgrades come today from Deutsche Bank. The German firm has increased its recommendation from ‘hold’ to ‘buy’.

The inclusion of Grifols in its list of favorite stocks to buy comes in parallel to a 20% improvement in its valuation. Its previous target price of 25 euros per share, set on April 20, barely left room for a further 3% upside from Friday’s closing price.

The new target price for Grifols, 30 euros per share, represents an additional upside potential of 23% compared to Friday’s closing price.

The strong gains achieved by Grifols on Friday, 8.5% at the close and up to 16% during the session, allowed it to erase all the negative balance accumulated by its share price since the beginning of 2021. Today’s trading day points to its bullish balance since January, while awaiting further updates on the stock market outlook from investment firms.

The 30 euros per share set by Deutsche Bank is already higher than the 27.50 euros per share that the market consensus has so far considered to be the average target price.

Source: Expansión.