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Reasons to Hold Fresenius Medical Stock in Your Portfolio for Now
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Key Takeaways
Fresenius Medical shares gained 13.3% YTD while the industry declined 11.5%.
Fresenius Medical expanded its global network with acquisitions and partnerships.
Q2 earnings and revenues beat estimates, aided by pricing momentum and cost savings.
Fresenius Medical Care AG & Co. (FMS - Free Report) is well-positioned for growth, backed by strategic acquisitions and partnerships, as well as a solid global foothold. However, rising costs remain a concern.
Shares of this Zacks Rank #3 (Hold) company have risen 13.3% year to date against the industry’s decline of 11.5%. The S&P 500 Index has decreased 14.4% in the same time frame.
The company, with a market capitalization of $15.11 billion, is one of the largest integrated providers of products and services for individuals undergoing dialysis following chronic kidney failure. Its bottom line is anticipated to improve 12.6% over the next five years. FMS’ earnings beat estimates in all the trailing four quarters, delivering an average surprise of 7.6%.
Image Source: Zacks Investment Research
Reasons Favoring FMS’s Growth
Strong Global Foothold: Fresenius Medical has established a robust presence across North America, EMEA, Asia Pacific, and Latin America, driven by organic growth, strategic acquisitions, and public-private partnerships that have expanded its dialysis services footprint. Recent moves include entering the Israeli market and acquiring an 85% stake in India’s Sandor Nephro Services, further strengthening its global network of 3,624 clinics serving over 308,000 patients. Despite pandemic-related challenges and revenue headwinds from divestitures, the company maintained steady momentum, with regions outside North America contributing positively and same-market treatment growth reaching 2.1% in the second quarter.
Strategic Acquisitions & Partnerships: Fresenius Medical has leveraged strategic acquisitions and partnerships to drive its growth strategy. It acquired NxStage Medical for $30 per share, expecting earnings accretion within three years and annual pre-tax savings of $80 million to $100 million.
The company’s 2025 growth strategy includes the merger of Fresenius Health Partners, InterWell Health and Cricket Health to manage 270,000 patients with kidney disease and associated medical costs of $11 billion. Additionally, it expanded its home dialysis market through a distribution deal with JMS Co., Ltd. in Japan and extended agreements with DaVita and Aetna to enhance patient access to home hemodialysis and value-based care.
Strong Q2 Results: FMS exited the second quarter on a strong note, with its earnings and revenues surpassing their respective Zacks Consensus Estimate. Overall pricing momentum also supported growth in the Care Enablement segment. However, the effects of elevated mortality will likely continue to have a negative impact on sales.
Per management, during the first quarter, the FME25 transformation program continued its positive momentum, delivering EUR 58 million additional sustainable savings while related one-time costs, treated as special items, amounted to EUR 53 million. The company confirmed its full-year target of approximately EUR 180 million in additional annual savings, totaling EUR 1,050 million by the end of 2027.
A Factor That May Offset FMS’s Gains
Rising Costs & Business Optimization Hurt Short-Term Prospect: Fresenius Medical continues to face significant challenges in the labor market, resulting in meaningfully higher costs. While there are signs of stabilization in the labor market, labor expenses increased by EUR 150 million to EUR 200 million due to continued investments in the workforce. Inflation added EUR 100 million to EUR 150 million in costs, primarily affecting the supply chain and operational expenses.
Additionally, overall treatments decreased for the year ended Dec. 31, 2024, compared with Dec. 31, 2023, primarily due to divestitures in connection with Legacy Portfolio Optimization, which had a negative impact on overall treatment volume. Specifically in the U.S. market, volumes were negatively affected by the cancelation of less profitable acute care contracts, contributing to a 0.2% decline in Same Market Treatment Growth for the year ended Dec. 31, 2024, in addition to the impacts from divestitures. Foreign currency fluctuations also had a negative impact on financial results.
Estimate Trend
The Zacks Consensus Estimate for 2025 revenues is pegged at $22.2 billion, indicating 5.9% year-over-year growth. The consensus mark for earnings is pinned at $2.23 per share, implying growth of 34.3% from the year-ago level.
Key Picks
Some better-ranked stocks in the broader medical space are West Pharmaceutical Services, Inc. (WST - Free Report) , Medpace Holdings, Inc. (MEDP - Free Report) and Envista (NVST - Free Report) .
West Pharmaceutical reported second-quarter 2025 adjusted earnings per share (EPS) of $1.84, which beat the Zacks Consensus Estimate by 21.9%. Revenues of $766.5 million surpassed the consensus estimate by 5.4%. It currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
West Pharmaceutical has a long-term estimated growth rate of 8.5%. WST’s earnings surpassed estimates in each of the trailing four quarters, the average surprise being 16.8%.
Medpace Holdings, sporting a Zacks Rank of 1, reported second-quarter 2025 EPS of $3.10, which beat the Zacks Consensus Estimate by 3.3%. Revenues of $603.3 million outpaced the consensus mark by 11.5%.
Medpace Holdings has a long-term estimated growth rate of 11.4%. MEDP’s earnings surpassed estimates in each of the trailing four quarters, the average surprise being 13.9%.
Envista reported second-quarter 2025 adjusted EPS of 26 cents, which beat the Zacks Consensus Estimate by 8.3%. Revenues of $682 million surpassed the Zacks Consensus Estimate by 6.3%. It currently carries a Zacks Rank #2 (Buy).
Envista has a long-term estimated growth rate of 16.8%. NVST’s earnings surpassed estimates in each of the trailing four quarters, the average surprise being 16.50%.
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Reasons to Hold Fresenius Medical Stock in Your Portfolio for Now
Key Takeaways
Fresenius Medical Care AG & Co. (FMS - Free Report) is well-positioned for growth, backed by strategic acquisitions and partnerships, as well as a solid global foothold. However, rising costs remain a concern.
Shares of this Zacks Rank #3 (Hold) company have risen 13.3% year to date against the industry’s decline of 11.5%. The S&P 500 Index has decreased 14.4% in the same time frame.
The company, with a market capitalization of $15.11 billion, is one of the largest integrated providers of products and services for individuals undergoing dialysis following chronic kidney failure. Its bottom line is anticipated to improve 12.6% over the next five years. FMS’ earnings beat estimates in all the trailing four quarters, delivering an average surprise of 7.6%.
Image Source: Zacks Investment Research
Reasons Favoring FMS’s Growth
Strong Global Foothold: Fresenius Medical has established a robust presence across North America, EMEA, Asia Pacific, and Latin America, driven by organic growth, strategic acquisitions, and public-private partnerships that have expanded its dialysis services footprint. Recent moves include entering the Israeli market and acquiring an 85% stake in India’s Sandor Nephro Services, further strengthening its global network of 3,624 clinics serving over 308,000 patients. Despite pandemic-related challenges and revenue headwinds from divestitures, the company maintained steady momentum, with regions outside North America contributing positively and same-market treatment growth reaching 2.1% in the second quarter.
Strategic Acquisitions & Partnerships: Fresenius Medical has leveraged strategic acquisitions and partnerships to drive its growth strategy. It acquired NxStage Medical for $30 per share, expecting earnings accretion within three years and annual pre-tax savings of $80 million to $100 million.
The company’s 2025 growth strategy includes the merger of Fresenius Health Partners, InterWell Health and Cricket Health to manage 270,000 patients with kidney disease and associated medical costs of $11 billion. Additionally, it expanded its home dialysis market through a distribution deal with JMS Co., Ltd. in Japan and extended agreements with DaVita and Aetna to enhance patient access to home hemodialysis and value-based care.
Strong Q2 Results: FMS exited the second quarter on a strong note, with its earnings and revenues surpassing their respective Zacks Consensus Estimate. Overall pricing momentum also supported growth in the Care Enablement segment. However, the effects of elevated mortality will likely continue to have a negative impact on sales.
Per management, during the first quarter, the FME25 transformation program continued its positive momentum, delivering EUR 58 million additional sustainable savings while related one-time costs, treated as special items, amounted to EUR 53 million. The company confirmed its full-year target of approximately EUR 180 million in additional annual savings, totaling EUR 1,050 million by the end of 2027.
A Factor That May Offset FMS’s Gains
Rising Costs & Business Optimization Hurt Short-Term Prospect: Fresenius Medical continues to face significant challenges in the labor market, resulting in meaningfully higher costs. While there are signs of stabilization in the labor market, labor expenses increased by EUR 150 million to EUR 200 million due to continued investments in the workforce. Inflation added EUR 100 million to EUR 150 million in costs, primarily affecting the supply chain and operational expenses.
Additionally, overall treatments decreased for the year ended Dec. 31, 2024, compared with Dec. 31, 2023, primarily due to divestitures in connection with Legacy Portfolio Optimization, which had a negative impact on overall treatment volume. Specifically in the U.S. market, volumes were negatively affected by the cancelation of less profitable acute care contracts, contributing to a 0.2% decline in Same Market Treatment Growth for the year ended Dec. 31, 2024, in addition to the impacts from divestitures. Foreign currency fluctuations also had a negative impact on financial results.
Estimate Trend
The Zacks Consensus Estimate for 2025 revenues is pegged at $22.2 billion, indicating 5.9% year-over-year growth. The consensus mark for earnings is pinned at $2.23 per share, implying growth of 34.3% from the year-ago level.
Key Picks
Some better-ranked stocks in the broader medical space are West Pharmaceutical Services, Inc. (WST - Free Report) , Medpace Holdings, Inc. (MEDP - Free Report) and Envista (NVST - Free Report) .
West Pharmaceutical reported second-quarter 2025 adjusted earnings per share (EPS) of $1.84, which beat the Zacks Consensus Estimate by 21.9%. Revenues of $766.5 million surpassed the consensus estimate by 5.4%. It currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
West Pharmaceutical has a long-term estimated growth rate of 8.5%. WST’s earnings surpassed estimates in each of the trailing four quarters, the average surprise being 16.8%.
Medpace Holdings, sporting a Zacks Rank of 1, reported second-quarter 2025 EPS of $3.10, which beat the Zacks Consensus Estimate by 3.3%. Revenues of $603.3 million outpaced the consensus mark by 11.5%.
Medpace Holdings has a long-term estimated growth rate of 11.4%. MEDP’s earnings surpassed estimates in each of the trailing four quarters, the average surprise being 13.9%.
Envista reported second-quarter 2025 adjusted EPS of 26 cents, which beat the Zacks Consensus Estimate by 8.3%. Revenues of $682 million surpassed the Zacks Consensus Estimate by 6.3%. It currently carries a Zacks Rank #2 (Buy).
Envista has a long-term estimated growth rate of 16.8%. NVST’s earnings surpassed estimates in each of the trailing four quarters, the average surprise being 16.50%.