AlsterResearch Initiation: Stratec - Challenging base effect for 2022

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What’s it all about?

Stratec designs and manufactures fully automated analyser systems for its partners in the fields of clinical diagnostics and biotechnology. The group acts as an original equipment manufacturer partner to primary players in the life sciences and in-vitro diagnostics markets. It provides a comprehensive range of software and hardware solutions as well as related complex consumables and benefits from a strong outsourcing trend. Moreover, COVID-19 was a major growth contributor for Stratec in 2021. This was reflected in its strong results in 9M 2021, both in terms of sales and earnings. Consequently, management raised its 2021 sales and adj. EBIT margin guidance for 2021. However, given Stratec’s exposure to COVID-19-related demand, the visibility for 2022 is uncertain and we believe that the base effect could be a challenge for growth in 2022. Hence, we see limited upside potential considering the current valuation levels. Based on DCF, we initiate coverage with HOLD and a PT of EUR 130.00.