Berenberg has opened coverage on Evotec AG (NASDAQ:EVO) and issued a Buy rating with a price target of EUR10.00. Evotec is currently trading at $3.42. InvestingPro’s Fair Value analysis places the stock slightly below its assessment of fair value, with analyst targets ranging from $3.09 to $7.20.
The German bank characterized Evotec as a globally known contract research organization - a provider of end-to-end services for drug discovery and development to pharmaceutical companies, biotech firms, and academic institutions. Evotec’s market capitalization stands at $1.24 billion, and the firm competes in a crowded outsourcing segment of the life sciences industry.
Berenberg outlined the company’s three primary revenue streams: fee-for-service contracts across discovery, development and manufacturing; technology licensing; and risk-sharing arrangements tied to drug pipeline development. Over the last twelve months Evotec reported $887.92 million in revenue, a figure that includes a 2.67% decline versus the prior comparable period.
The note emphasized Evotec’s full research platform infrastructure, which the bank says equips the company to deliver a wide array of industry solutions for novel drug R&D. Berenberg pointed to Evotec’s capabilities across multiple treatment modalities - including small molecules, biologics, and cell and gene therapy - and singled out the firm’s standing in drug discovery that leverages induced pluripotent stem cells (iPSC).
Analysts at Berenberg also flagged structural shifts that support outsourcing demand, including an industry move to continuous manufacturing and broader favorable trends in pharmaceutical and biotech R&D outsourcing. Those thematic drivers were cited alongside Evotec’s technical strengths as part of the rationale for initiating coverage with a Buy rating.
Operational results released by Evotec SE show recent headwinds. The company reported a 7.1% decline in nine-month revenues to €535.1 million. The decrease was driven primarily by a 12.3% revenue drop in the Discovery & Preclinical Development segment, although Evotec’s Just - Evotec Biologics unit posted an 11.3% increase in revenue during the same period. These divergent segment performances have affected the company’s recent top-line trajectory.
In separate market activity noted alongside the Evotec coverage, Evolution Global Acquisition Corp completed its initial public offering, raising $240 million. The SPAC sold 24 million units at $10.00 apiece, including exercise in full of the underwriters’ over-allotment option for an extra 3 million units. Each unit consists of one Class A ordinary share and one-half of one redeemable warrant. In addition to the IPO, Evolution Global completed a private sale of 6.8 million private placement warrants, generating $6.8 million.
Both Evotec and Evolution Global are navigating developments in their respective financial landscapes - Evotec through mixed revenue trends and an initiation of analyst coverage, and Evolution Global through completed capital markets activity.
Summary
Berenberg’s initiation on Evotec with a Buy rating and EUR10.00 target highlights the company’s end-to-end CRO platform and niche strengths such as iPSC-based discovery, while recent reported revenues show moderate declines. Separately, Evolution Global Acquisition Corp finished a $240 million IPO.
Key details
- Coverage initiation: Berenberg begins coverage of Evotec AG with a Buy rating and EUR10.00 price target.
- Market data: Evotec trading at $3.42 with InvestingPro targets between $3.09 and $7.20; market capitalization $1.24 billion.
- Revenue and segments: $887.92 million revenue over the last twelve months (down 2.67%); nine-month revenue of €535.1 million (down 7.1%), with Discovery & Preclinical Development down 12.3% and Just - Evotec Biologics up 11.3%.