Eurofins Earnings: COVID-19 Sales Losses Almost Over as Underlying Growth Starts to Pick Up

We maintain our EUR 80 fair value estimate for narrow-moat Eurofins following second-quarter results that were about as expected. Revenue growth excluding the loss of COVID-19 sales accelerated sequentially from the first quarter and held strong at 7% year over year for the first half of 2023. The firm’s pricing power has supported this robust revenue growth and is expected to help fully overtake the drag of lost COVID-19 sales on revenue in the back half of the year. However, macroeconomic effects from the war in Ukraine and foreign exchange headwinds persist, weighing on profitability gains and causing management to decrease full-year 2023 guidance.