We use cookies to understand how you use our site and to improve your experience.
This includes personalizing content and advertising.
By pressing "Accept All" or closing out of this banner, you consent to the use of all cookies and similar technologies and the sharing of information they collect with third parties.
You can reject marketing cookies by pressing "Deny Optional," but we still use essential, performance, and functional cookies.
In addition, whether you "Accept All," Deny Optional," click the X or otherwise continue to use the site, you accept our Privacy Policy and Terms of Service, revised from time to time.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Here's Why You Should Hold Avantor Stock in Your Portfolio for Now
Read MoreHide Full Article
Key Takeaways
AVTR shows growth potential with a broad product portfolio and strategic deals, despite Lab Solutions' lag.
AVTR logged about $100M in new pharma wins and extended key contracts, boosting revenue visibility.
AVTR is advancing a cost transformation, targeting $400M run-rate savings by 2027.
Avantor, Inc. (AVTR - Free Report) is well-poised for growth in the coming quarters, courtesy of its strong product portfolio. The optimism led by strategic deals and cost transformation progress also looks promising. However, weakness in the Lab Solutions segment remains a cause for concern.
Over the past six months, this Zacks Rank #3 (Hold) stock has lost 12.2%, underperforming the 12.2% growth of the industry and 14.4% rise of the S&P 500.
The renowned provider of mission-critical products and services has a market capitalization of $8.37 billion. The company expects 3.2% earnings growth for the next five years and to witness continued improvements in its business. Avantor’s earnings surpassed the Zacks Consensus Estimate in one of the trailing four quarters, missed twice and met once, delivering a negative surprise of 0.1%, on average.
Image Source: Zacks Investment Research
Factors Favoring AVTR’s Growth
Product Portfolio: Avantor offers a broad, integrated portfolio of millions of products and services that enables customized solutions across research, diagnostics and QA/QC workflows, supported by a robust e-commerce platform and the Avantor Business System that drives execution and continuous improvement.
The company manufactures high and ultra-high-purity products for highly regulated industries, with trusted brands like J.T. Baker chemicals and NuSil silicones meeting exacting performance standards for life sciences, medical devices and aerospace applications.
On the second-quarter earnings call, management also highlighted ongoing digital and product innovation, including the launch of Avantor Navigator, its first in-house AI-driven application, a new unified digital buying experience and improved pricing optimization tools, while continued strength in NuSil medical-grade silicones underscores momentum in the Bioscience Production segment.
Strategic Deals: Avantor’s third-quarter earnings calls highlighted improving customer engagement and clearer revenue visibility, supported by both innovation-led collaborations and solid commercial execution. Management cited the collaboration with BlueWhale Bio as a step toward advancing next-generation therapy enablement, positioning it primarily as a technology and innovation partnership rather than a near-term revenue driver. More importantly, Avantor pointed to strong commercial momentum, including roughly $100 million in new business wins across two top-15 global pharma customers that will begin phasing in from 2026.
In addition, the company executed a five-year extension with BIO Business Solutions, expanding access to over 10,000 life sciences customers. AVTR secured multiple contract extensions with top-15 global pharma accounts, expected to translate into more than $100 million in share gains over time through a mix of retained and competitive wins, providing a meaningful tailwind to future volumes and market share.
Cost Transformation Progress: Per the third-quarter earnings call, Avantor reiterated solid progress on its multi-year cost transformation program, staying on track to achieve $400 million in run-rate savings by the end of 2027, with cost discipline standing out despite ongoing market and operational pressures.
Adjusted SG&A came in better than expected and below prior-year levels, helped by lower incentive compensation accruals, while the company generated $172 million in free cash flow, representing a strong 124% conversion of adjusted net income excluding transformation-related payments. Continued cash generation and proactive refinancing supported further deleveraging, with adjusted net leverage improving to 3.1x, as management emphasized that cost actions, process simplification and operating leverage remain central to the Avantor Revival plan and long-term margin recovery.
Factors That May Offset the Growth of AVTR
Weakness in Lab Solutions Segment: Per the third-quarter earnings call, Avantor’s Lab Solutions segment continued to lag expectations due to weak activity in research and academic markets. Uncertainty in basic research funding and mid-single-digit headwinds across distribution, services and education weighed on results. Demand for consumables, equipment and science education remained soft. Proprietary lab chemicals posted steady mid-single-digit growth, but this was not enough to offset broader declines.
Lower volumes pressured margins by reducing manufacturing absorption and limiting pricing flexibility. Management noted stable key account contracts and about $100 million in new wins starting in 2026, though near-term conditions remain challenging.
Estimate Trend
Avantor has been witnessing a stable estimate revision trend for 2025. Over the past 60 days, the Zacks Consensus Estimate for its earnings per share has remained stable at 90 cents.
The Zacks Consensus Estimate for fourth-quarter 2025 revenues is pegged at $1.62 billion, which indicates a 4.2% decline from the year-ago reported number.
Stocks to Consider
Some better-ranked stocks from the broader medical space are Intuitive Surgical (ISRG - Free Report) , Medpace Holdings (MEDP - Free Report) and Boston Scientific (BSX - Free Report) .
Intuitive Surgical, carrying a Zacks Rank #2 (Buy) at present, posted a third-quarter 2025 adjusted earnings per share (EPS) of $2.40, beating the Zacks Consensus Estimate by 20.6%. Revenues of $2.51 billion topped the Zacks Consensus Estimate by 3.9%. You can see the complete list of today’s Zacks #1 Rank stocks here.
ISRG has an estimated long-term earnings growth rate of 15.7% compared with the industry’s 11.9% growth. The company’s earnings outpaced estimates in each of the trailing four quarters, the average surprise being 16.34%.
Medpace, currently carrying a Zacks Rank #2, reported a third-quarter 2025 EPS of $3.86, which surpassed the Zacks Consensus Estimate by 10.29%. Revenues of $659.9 million beat the Zacks Consensus Estimate by 3.04%.
MEDP has an estimated earnings growth rate of 17.1% for 2025 compared with the industry’s 16.6% growth. The company’s earnings beat estimates in each of the trailing four quarters, the average surprise being 14.28%.
Boston Scientific, currently carrying a Zacks Rank #2, reported a third-quarter 2025 adjusted EPS of 75 cents, which surpassed the Zacks Consensus Estimate by 5.6%. Revenues of $5.07 billion topped the Zacks Consensus Estimate by 1.9%.
BSX has an estimated long-term earnings growth rate of 16.4% compared with the industry’s 13.5% growth. The company’s earnings beat estimates in each of the trailing four quarters, the average surprise being 7.36%.
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
Here's Why You Should Hold Avantor Stock in Your Portfolio for Now
Key Takeaways
Avantor, Inc. (AVTR - Free Report) is well-poised for growth in the coming quarters, courtesy of its strong product portfolio. The optimism led by strategic deals and cost transformation progress also looks promising. However, weakness in the Lab Solutions segment remains a cause for concern.
Over the past six months, this Zacks Rank #3 (Hold) stock has lost 12.2%, underperforming the 12.2% growth of the industry and 14.4% rise of the S&P 500.
The renowned provider of mission-critical products and services has a market capitalization of $8.37 billion. The company expects 3.2% earnings growth for the next five years and to witness continued improvements in its business. Avantor’s earnings surpassed the Zacks Consensus Estimate in one of the trailing four quarters, missed twice and met once, delivering a negative surprise of 0.1%, on average.
Image Source: Zacks Investment Research
Factors Favoring AVTR’s Growth
Product Portfolio: Avantor offers a broad, integrated portfolio of millions of products and services that enables customized solutions across research, diagnostics and QA/QC workflows, supported by a robust e-commerce platform and the Avantor Business System that drives execution and continuous improvement.
The company manufactures high and ultra-high-purity products for highly regulated industries, with trusted brands like J.T. Baker chemicals and NuSil silicones meeting exacting performance standards for life sciences, medical devices and aerospace applications.
On the second-quarter earnings call, management also highlighted ongoing digital and product innovation, including the launch of Avantor Navigator, its first in-house AI-driven application, a new unified digital buying experience and improved pricing optimization tools, while continued strength in NuSil medical-grade silicones underscores momentum in the Bioscience Production segment.
Strategic Deals: Avantor’s third-quarter earnings calls highlighted improving customer engagement and clearer revenue visibility, supported by both innovation-led collaborations and solid commercial execution. Management cited the collaboration with BlueWhale Bio as a step toward advancing next-generation therapy enablement, positioning it primarily as a technology and innovation partnership rather than a near-term revenue driver. More importantly, Avantor pointed to strong commercial momentum, including roughly $100 million in new business wins across two top-15 global pharma customers that will begin phasing in from 2026.
In addition, the company executed a five-year extension with BIO Business Solutions, expanding access to over 10,000 life sciences customers. AVTR secured multiple contract extensions with top-15 global pharma accounts, expected to translate into more than $100 million in share gains over time through a mix of retained and competitive wins, providing a meaningful tailwind to future volumes and market share.
Cost Transformation Progress: Per the third-quarter earnings call, Avantor reiterated solid progress on its multi-year cost transformation program, staying on track to achieve $400 million in run-rate savings by the end of 2027, with cost discipline standing out despite ongoing market and operational pressures.
Adjusted SG&A came in better than expected and below prior-year levels, helped by lower incentive compensation accruals, while the company generated $172 million in free cash flow, representing a strong 124% conversion of adjusted net income excluding transformation-related payments. Continued cash generation and proactive refinancing supported further deleveraging, with adjusted net leverage improving to 3.1x, as management emphasized that cost actions, process simplification and operating leverage remain central to the Avantor Revival plan and long-term margin recovery.
Factors That May Offset the Growth of AVTR
Weakness in Lab Solutions Segment: Per the third-quarter earnings call, Avantor’s Lab Solutions segment continued to lag expectations due to weak activity in research and academic markets. Uncertainty in basic research funding and mid-single-digit headwinds across distribution, services and education weighed on results. Demand for consumables, equipment and science education remained soft. Proprietary lab chemicals posted steady mid-single-digit growth, but this was not enough to offset broader declines.
Lower volumes pressured margins by reducing manufacturing absorption and limiting pricing flexibility. Management noted stable key account contracts and about $100 million in new wins starting in 2026, though near-term conditions remain challenging.
Estimate Trend
Avantor has been witnessing a stable estimate revision trend for 2025. Over the past 60 days, the Zacks Consensus Estimate for its earnings per share has remained stable at 90 cents.
The Zacks Consensus Estimate for fourth-quarter 2025 revenues is pegged at $1.62 billion, which indicates a 4.2% decline from the year-ago reported number.
Stocks to Consider
Some better-ranked stocks from the broader medical space are Intuitive Surgical (ISRG - Free Report) , Medpace Holdings (MEDP - Free Report) and Boston Scientific (BSX - Free Report) .
Intuitive Surgical, carrying a Zacks Rank #2 (Buy) at present, posted a third-quarter 2025 adjusted earnings per share (EPS) of $2.40, beating the Zacks Consensus Estimate by 20.6%. Revenues of $2.51 billion topped the Zacks Consensus Estimate by 3.9%. You can see the complete list of today’s Zacks #1 Rank stocks here.
ISRG has an estimated long-term earnings growth rate of 15.7% compared with the industry’s 11.9% growth. The company’s earnings outpaced estimates in each of the trailing four quarters, the average surprise being 16.34%.
Medpace, currently carrying a Zacks Rank #2, reported a third-quarter 2025 EPS of $3.86, which surpassed the Zacks Consensus Estimate by 10.29%. Revenues of $659.9 million beat the Zacks Consensus Estimate by 3.04%.
MEDP has an estimated earnings growth rate of 17.1% for 2025 compared with the industry’s 16.6% growth. The company’s earnings beat estimates in each of the trailing four quarters, the average surprise being 14.28%.
Boston Scientific, currently carrying a Zacks Rank #2, reported a third-quarter 2025 adjusted EPS of 75 cents, which surpassed the Zacks Consensus Estimate by 5.6%. Revenues of $5.07 billion topped the Zacks Consensus Estimate by 1.9%.
BSX has an estimated long-term earnings growth rate of 16.4% compared with the industry’s 13.5% growth. The company’s earnings beat estimates in each of the trailing four quarters, the average surprise being 7.36%.