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Gerresheimer (XTRA:GXI) has come under pressure after disclosing accounting issues around revenue recognition and inventory valuation, with potential write downs of €220 million to €240 million and a delay to its 2024 financial statements.
See our latest analysis for Gerresheimer.
The accounting investigation and potential €220 million to €240 million write downs have clearly shifted risk perceptions, with a 7 day share price return of negative 22.49% and a 1 year total shareholder return decline of 74.67%, pointing to fading momentum despite a recent 4.52% 1 day share price rebound to €19.89.
If this accounting shock has you reassessing risk, it could be a good moment to look at our list of 102 top founder-led companies as fresh ideas for further research.
With the share price down sharply over 1 year and the stock trading at a sizeable discount to both analyst price targets and some intrinsic estimates, you have to ask: is this a reset buying opportunity, or is the market correctly pricing in future challenges?
Gerresheimer’s most followed narrative points to a fair value of €34.17 per share, well above the last close at €19.89, which puts the recent sell off into sharper focus.
The acquisition of Bormioli Pharma is expected to propel Gerresheimer’s revenues from €2 billion in 2024 to around €2.5 billion in 2025, while also enhancing the company’s adjusted EBITDA margin to approximately 22%. This marks a significant step forward in terms of revenue growth and profitability enhancement.
Want to see what sits behind that higher fair value? The narrative leans on rising earnings, firmer margins and a future profit multiple that assumes investors stay confident. Curious which specific profit and growth assumptions need to hold up to reach that outcome? Read on in the full narrative to see how each piece fits together.
The fair value estimate of €34.17 is built using a 10.19% discount rate, applied to analysts’ expectations for revenue growth, margin improvement and future earnings up to around 2028. In simple terms, the model projects future profits, then discounts them back to today using that higher required return, and applies a future P/E multiple of 13.63x to those expected earnings to anchor the end point.
Importantly, this narrative also assumes Gerresheimer continues to grow its top line and lift profit margins from current levels, while keeping the number of shares roughly flat. Those ingredients together support the view that today’s price embeds a large gap to the earnings power analysts expect the business to reach over the coming years.