Carl Zeiss Meditec
Note: This is a daily stock update and the information stands true as of 21/05/25, 09:00 CET.
Company Update:
Expert Opinion:
CZM is a terrific company that benefits from co leadership positions in its end markets. There is a structural underlying growth. Valuation is very cheap and we see significant upside when the recovery in China and in the US materializes. This is a key buy and hold over the long run, which still trades at decent valuation levels considering its growth prospects.
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Company Update:
CZM’s shares have rebounded strongly, gaining >35% year-to-date from multi-year lows with double positive momentum. Despite a solid run, it still offers a healthy upside because of following reasons:
1/ strong uptake of current offerings (visible in solid order intake growth);
2/ innovations and product launches in the US and China;
3/ positive shoots from China – backed by strong sales of refractive consumables during it’s winter peak season. Remember 90% of Chinese senior high school students suffer from short sightedness. Hence, we expect a healthy rebound during its summer season particularly because majority of refractive customers are students, and the summer holidays of two months offers a decent time to undergo the procedures;
4/ On a separate note, regarding tariffs, €250m of US sales are subject to tariffs, primarily on products supplied from Europe. Direct exposure from China is minimal. Pricing measures are being considered if tariffs become permanent; and
5/ lastly, a change in leadership. Dr Markus Weber stepping down as President and CEO. He is succeeded by Maximilian Foerst, currently Head of ZEISS Greater China.
Overall, while all the negatives are priced in as the stock still trades c.70% lower than its all-time highs, the focus is now on the operational rebound.
Expert Opinion:
CZM is a terrific company that benefits from co leadership positions in its end markets. There is a structural underlying growth. Valuation is very cheap and we see significant upside when the recovery in China and in the US materializes. This is a key buy and hold over the long run, which still trades at decent valuation levels considering its growth prospects.
For daily updates, subscribe to our newsletter and for detailed information, reach out to us at sales@alphavalue.eu
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Alphavalue Morning Market Tip
Q3 results were in line – guidance confirmed but marginally negative news.