Top Analysts Bullish on HelloFresh, Aixtron, and M1 Kliniken Stocks with Over 50% Upside Potential
M1 Kliniken: Strong Profitable Growth
Following the release of strong half-year financial results, analysts at Warburg Research have raised their profit estimates for M1 Kliniken AG. The estimates for EBITDA and net profit for the current and upcoming years have been slightly adjusted upwards, with an increase of over 20% projected for 2026. The company’s profitability is attributed to the significant number of established locations for cosmetic medical treatments, allowing for high profitability while investing in the clinic network. Plans are in place to open the first location in the United States next year, marking the beginning of expansion into the world’s largest beauty market. Analysts maintain their buy recommendation and have raised the price target from 27 EUR to 28 EUR, with the current stock trading between 16 EUR and 17 EUR.
In the first half of 2024, the M1 Group increased its consolidated revenue by 11.2% to 167.7 million EUR. Operating profit before interest and taxes (EBIT) nearly doubled to 14.5 million EUR, and net profit (after minorities) almost tripled to 9.9 million EUR. Consequently, earnings per share rose from 0.17 EUR to 0.53 EUR. The growth driver continues to be the high-margin core business in beauty. With the brand „M1 Med Beauty,“ the group is the leading private provider of cosmetic medical treatments in Europe and is expanding its market position globally.
The robust operational performance is expected to continue in the coming months and beyond. By the end of 2029, M1 aims to increase the number of specialty centers for aesthetic medicine from 63 to 150 to 200, positioning itself as a global market leader. The beauty segment alone is projected to generate between 200 and 300 million EUR with an EBIT margin of at least 20%. Additionally, dividends – which stood at 0.50 EUR per share this year – are expected to see significant increases in the coming years.
Furthermore, there is potential for stock price appreciation driven by acquisition speculation. M1 has reported interest from several private equity firms, with six reputable entities expressing interest in acquiring a stake or the beauty segment outright. Strategic options are also being considered for the trading segment, with a strategic investor expressing interest.
HelloFresh: New Strategy Yet to Impress
HelloFresh, a meal kit delivery company, has faced operational challenges in recent months, leading to a lull in acquisition speculation. The company is grappling with growth issues and high costs, impacting its financial performance.
In the second quarter of 2024, HelloFresh reported revenue of 1.95 billion EUR, a 0.9% increase in constant currency compared to the previous year’s quarter. However, adjusted EBITDA declined from 192 million EUR to 146 million EUR.
CEO Dominik Richter is working on a turnaround strategy, stating, „The meal kit market will consolidate to a new size in the near future. We will optimize our cost base and adapt to these new conditions. This includes capacity optimization, review of investment plans, and efficient use of existing production facilities.“ The focus is on improving margins at the expense of revenue growth.
Most analysts are closely monitoring the strategy shift and currently recommend holding or remaining neutral on HelloFresh stock. UBS even rates the stock as a „Sell“ with a price target of 5.90 EUR, while the stock closed at 6.73 EUR last Friday.
Aixtron: Lack of Visibility
Analysts have been overly optimistic about Aixtron this year, leading to maintained buy recommendations but reduced price targets. Jefferies recently lowered the fair value for the semiconductor equipment manufacturer from 35 EUR to 27 EUR. Despite the adjustment, analysts still advise buying the stock. Aixtron is currently trading just above 15 EUR, reaching a yearly low not seen since 2021.
Jefferies remains convinced of the stock’s medium-term prospects, but initial estimates for the upcoming year have been revised downwards. The uncertainty surrounding SiC semiconductors makes it challenging to forecast Aixtron’s business development.
In conclusion, M1 Kliniken is currently showcasing a robust business performance, poised for growth in revenue and profit. Shareholders can anticipate increasing dividends, with the potential for a higher stock price through acquisition by private equity firms. Conversely, acquisition speculation is lacking for HelloFresh at present. The success of its new profitability-focused strategy remains uncertain, with market acceptance yet to be determined. Aixtron faces market uncertainty due to a lack of visibility in the SiC semiconductor sector.