Fresenius SE & Co. KGaA (FRE.DE) | Investment Case

1. Company Snapshot

1.a. Company Description

Fresenius SE & Co. KGaA, a health care company, provides products and services for dialysis, hospitals, and outpatient medical care.It operates through four segments: Fresenius Medical Care, Fresenius Kabi, Fresenius Helios, and Fresenius Vamed.The Fresenius Medical Care segment offers products and services for patients with chronic kidney failure.

This segment provides dialyzers, hemodialysis machines, and related disposable products, as well as dialysis-related services.The Fresenius Kabi segment engages in the therapy and care of therapy and care ill patients.This segment offers IV drugs, including intravenously administered generic drugs for oncology, anesthetics, analgesics, anti-infectives, and critical care; parenteral and enteral nutrition products; infusion solutions and blood volume substitutes for infusion therapy; biosimilars, a biological medicine for autoimmune and oncology diseases; medical devices and disposal used to administer IV generic drugs, infusion therapies, and clinical nutrition products; and transfusion products for collection of blood components and corporeal therapies.

The Fresenius Helios segment operates 90 hospitals, approximately 130 outpatient clinics, and 6 prevention centers in Germany; and 49 hospitals, 88 outpatient clinics, and approximately 300 risk prevention centers in Spain.This segment also provides services in the field of fertility treatments through 33 clinics and additional 39 sites across 10 countries on 3 continents.The Fresenius Vamed segment manages projects and offers services for hospitals and other health care facilities.

This segment provides project development, planning, and turnkey construction services, as well as maintenance, technical management, and operational management services.The company was formerly known as Fresenius SE and changed its name to Fresenius SE & Co. KGaA in January 2011.Fresenius SE & Co. KGaA was founded in 1912 and is headquartered in Bad Homburg vor der Höhe, Germany.

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1.b. Last Insights on FRE

Fresenius SE & Co. KGaA's recent performance was positively driven by several factors. The company's biosimilars, Conexxence and Bomyntra, received interchangeable designations from the FDA, enhancing their market potential. Additionally, the projected fair value for Fresenius SE KGaA is €95.95, indicating potential upside. The company's presence in the growing home healthcare market, with a projected CAGR of 8.9%, also supports its growth prospects. Furthermore, Fresenius Kabi's innovative products and medical technologies contribute to its competitive advantage. Recent earnings releases also highlight the company's financial stability.

1.c. Company Highlights

Last Price	47.55
Change Percentage	-0.65%
Open	48.05
Previous Close	47.86
Market Cap ( Millions)	26782
Volume	479004
Year High	50.74
Year Low	31.6
M A 50	47.98
M A 200	43.86

FCF Yield	4.62%
Dividend Yield	2.10%
ROE	5.92%
Debt / Equity	70.30%
Net Debt / EBIDTA	349.23%
Price To Book	1.48
Price Earnings Ratio	24.05
Price To FCF	21.65
Price To sales	1.2
EV / EBITDA	11.54

2. Fresenius Posts Strong Q3 Earnings, Raises Full-Year Guidance

Fresenius reported a robust Q3, with core EPS growing by 14% to €0.719, surpassing analyst estimates of €0.692. The company's revenue growth was driven by strong performances across its segments, including Kabi and Helios. Kabi achieved an EBIT margin of 16.7%, while Helios delivered an EBIT margin of 7.5%. The company's cash flow performance was also strong, with operating cash flow in Q3 driven by Kabi, contributing approximately €440 million.

Publication Date: Nov -14

                                    📋 Highlights
                                    EBIT Guidance Raised:
                                                Full-year EBIT growth guidance increased to 4%-8% (from 3%-7%), with core EPS up 14%.
Kabi EBIT Margin Excellence:
                                                Achieved 16.7% EBIT margin, driven by market leadership and margin expansion.
U.S. Healthcare Investment:
                                                Over $1 billion invested in the U.S. healthcare system for supply continuity and growth.
Biopharma Milestones:
                                                Denosumab secured FDA interchangeability designation and CMS billing codes, boosting scalability.
Cash Flow Strength:
                                                Q3 operating cash flow reached EUR 440 million, with EUR 2.2 billion in the last 12 months.

                                

Segment Performance

Kabi's performance was a highlight, with organic revenue growing by 7% and an EBIT margin of 16.7%. Helios Germany also performed well, with a 7% increase in activity growth. The biopharma segment continued to grow, with denosumab achieving a key milestone with CMS issuing permanent and product-specific billing codes. As Sara Hennicken, Chief Financial Officer, noted, "Kabi delivered a strong quarter, with organic revenue growing by 7%, and an EBIT margin of 16.7%."

Guidance and Outlook

Fresenius raised its full-year EBIT growth guidance from 3% to 7% to 4% to 8%. The company expects an acceleration of earnings growth in Q4, driven by positive phasing effects and an increase in EBIT contribution from Helios' performance program in Germany. Looking ahead to 2026, Fresenius expects favorable pricing in Germany, the ramp-up of biosimilars, and strong growth in IV Generics and Nutrition.

Valuation

With a P/E Ratio of 24.47, Fresenius is trading at a premium to its peers. However, the company's strong growth prospects and improving profitability metrics, including an ROE of 5.92% and ROIC of 4.59%, justify the premium. The company's Net Debt / EBITDA ratio of 3.49 is relatively high, but Fresenius is prioritizing deleveraging within its capital allocation framework. The Dividend Yield of 2.07% provides a relatively stable return for investors.

Investment Decisions

Fresenius is expected to continue making targeted investments to drive growth, with a focus on digital transformation and AI. As Graham Doyle from UBS noted, the company is likely to step up its investment focus, including potentially in Q4, to fuel the pipeline. Analysts estimate next year's revenue growth at 5.3%, indicating a stable outlook for the company.

3. NewsRoom

mAbxience and HP drive the use of artificial intelligence in biomanufacturing and biosimilar development

Dec -04

Source:

North America Heart Pump Device Market Forecast and Company Analysis Report 2025-2033 Featuring Abbott, Getinge, Teleflex, Fresenius, LivaNova, CorWave, JARVIK HEART, ABIOMED

Nov -28

Source:

Fresenius (XTRA:FRE): Does Recent Share Price Movement Reflect Its True Value?

Nov -28

Source:

How Recent Developments Are Rewriting the Story for Fresenius SE KGaA

Nov -27

Source:

United States Home Healthcare Market Analysis Report 2025-2033 Featuring 3M Healthcare, Apple, Arkray, B. Braun Melsungen, BD And Co, F. Hoffmann-La Roche, Fresenius, and Hollister

Nov -26

Source:

Liberty All-Star® Equity Fund October 2025 Monthly Update

Nov -14

Source:

Fresenius Kabi’s Adaptive Nomogram used on Aurora Xi Plasmapheresis System Now Operating Nationwide at BioLife Plasma Centers

Nov -12

Source:

Fresenius (XTRA:FRE): How Does Its Current Valuation Stack Up After This Year's Strong Share Price Rally?

Nov -07

Source:

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (2.73%)

6. Segments

Fresenius Helios

Expected Growth: 2.8%

Fresenius Helios' 2.8% growth is driven by increasing demand for private hospital services, strategic acquisitions, and expansion into new markets. Additionally, the segment benefits from a growing elderly population, rising healthcare expenditure, and a shift towards outpatient care. These factors, combined with Fresenius' operational efficiency and cost management, contribute to the segment's steady growth.

Fresenius Kabi

Expected Growth: 2.5%

Fresenius Kabi's 2.5% growth is driven by increasing demand for generic IV drugs, expansion in emerging markets, and strategic acquisitions. The segment benefits from a strong product portfolio, including biosimilars and injectables, as well as a growing presence in the US market. Additionally, cost savings initiatives and operational efficiencies contribute to the segment's growth.

Fresenius Vamed

Expected Growth: 3.2%

Fresenius Vamed's 3.2% growth is driven by increasing demand for healthcare infrastructure projects, strategic partnerships, and expansion into emerging markets. Additionally, the segment benefits from Fresenius SE's strong reputation, expertise in hospital operations, and investments in digital healthcare solutions, enabling it to capitalize on the growing need for efficient and high-quality healthcare services.

7. Detailed Products

Dialysis Machines

Fresenius Medical Care offers a range of dialysis machines for hemodialysis and peritoneal dialysis, designed to provide efficient and effective treatment for patients with end-stage renal disease.

Dialyzers

Fresenius Medical Care's dialyzers are designed to remove waste products from the blood during hemodialysis, offering high-flux and low-flux options for optimal treatment.

Peritoneal Dialysis Solutions

Fresenius Medical Care offers a range of peritoneal dialysis solutions designed to provide gentle and effective treatment for patients with end-stage renal disease.

Renal Pharmaceuticals

Fresenius Medical Care offers a range of pharmaceuticals designed to support patients with kidney disease, including phosphate binders, vitamin D analogs, and iron supplements.

Acute Care Solutions

Fresenius Medical Care's acute care solutions provide critical care support for patients in intensive care units, including continuous renal replacement therapy (CRRT) and plasma exchange.

Water Treatment Systems

Fresenius Medical Care's water treatment systems are designed to provide high-quality dialysis water for hemodialysis treatment, ensuring patient safety and treatment efficacy.

8. Fresenius SE & Co. KGaA's Porter Forces

Forces Ranking

Threat Of Substitutes

Fresenius SE & Co. KGaA operates in the healthcare industry, which has a moderate threat of substitutes. While there are alternative healthcare providers, Fresenius' specialized services and equipment create a barrier to entry for new entrants.

Bargaining Power Of Customers

Fresenius SE & Co. KGaA's customers are primarily healthcare providers and patients, who have limited bargaining power due to the specialized nature of Fresenius' services.

Bargaining Power Of Suppliers

Fresenius SE & Co. KGaA relies on a diverse range of suppliers for medical equipment, pharmaceuticals, and other inputs. While suppliers have some bargaining power, Fresenius' scale and diversification mitigate this risk.

Threat Of New Entrants

The healthcare industry has high barriers to entry, including regulatory hurdles, high capital requirements, and specialized expertise. This limits the threat of new entrants for Fresenius SE & Co. KGaA.

Intensity Of Rivalry

The healthcare industry is highly competitive, with many established players competing for market share. Fresenius SE & Co. KGaA faces intense rivalry from other healthcare providers, medical device manufacturers, and pharmaceutical companies.

9. SWOT Analysis

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

	Value
Debt Weight	45.45%
Debt Cost	9.19%
Equity Weight	54.55%
Equity Cost	9.19%
WACC	9.19%
Leverage	83.32%

11. Quality Control: Fresenius SE & Co. KGaA passed 2 out of 9 key points

Strong Liquidity

Low Deb

Strong Interest Coverage

Healthy Cash Flow

Operating Efficiency

Strong Return On Equity

Consistent Revenue Growth

Consistent Operating Cash Flow Growth

Margin Improvement

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Novartis

A-Score: 6.3/10

Value: 3.5

Growth: 4.2

Quality: 7.8

Yield: 7.5

Momentum: 5.5

Volatility: 9.3

1-Year Total Return ->

Ambea

A-Score: 6.1/10

Value: 6.3

Growth: 7.7

Quality: 4.7

Yield: 3.8

Momentum: 9.0

Volatility: 5.0

1-Year Total Return ->

HCA Healthcare

A-Score: 5.9/10

Value: 6.5

Growth: 7.2

Quality: 5.0

Yield: 2.0

Momentum: 6.0

Volatility: 9.0

1-Year Total Return ->

EssilorLuxottica

A-Score: 5.2/10

Value: 0.8

Growth: 5.8

Quality: 6.2

Yield: 3.1

Momentum: 8.0

Volatility: 7.0

1-Year Total Return ->

Fresenius

A-Score: 5.1/10

Value: 4.5

Growth: 1.2

Quality: 3.7

Yield: 3.8

Momentum: 8.5

Volatility: 8.7

1-Year Total Return ->

Novo Nordisk

A-Score: 4.4/10

Value: 3.5

Growth: 8.8

Quality: 8.0

Yield: 5.0

Momentum: 0.0

Volatility: 1.3

1-Year Total Return ->

Peers Metrics

12.e Scoring ^Insights

12.f DCF ^BETA

Parameters

Short Term Growth

8.45%

Short term Time

10.0

Long-Term Growth

2.00%

WACC

9.19%

Fresenius SE & Co. KGaA - DE0005785604

1. Company Snapshot

1.a. Company Description

1.b. Last Insights on FRE

1.c. Company Highlights

Less Volatile

Lower Quality

Cheaper

Earnings Miss

Revenues Miss

Lower Growth

Earnings Beats

Revenues Beats

Strong Momentum

Higher Yield

2. Fresenius Posts Strong Q3 Earnings, Raises Full-Year Guidance

Segment Performance

Guidance and Outlook

Valuation

Investment Decisions

3. NewsRoom

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (2.73%)

6. Segments

Fresenius Helios

Expected Growth: 2.8%

Fresenius Kabi

Expected Growth: 2.5%

Fresenius Vamed

Expected Growth: 3.2%

7. Detailed Products

Dialysis Machines

Dialyzers

Peritoneal Dialysis Solutions

Renal Pharmaceuticals

Acute Care Solutions

Water Treatment Systems

8. Fresenius SE & Co. KGaA's Porter Forces

Forces Ranking

Threat Of Substitutes

Bargaining Power Of Customers

Bargaining Power Of Suppliers

Threat Of New Entrants

Intensity Of Rivalry

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

11. Quality Control: Fresenius SE & Co. KGaA passed 2 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

47.55$

Current Price

47.55$

Potential

-0.00%

Expected Cash-Flows

12.e Scoring ^Insights

12.f DCF ^BETA