Overview
TD Cowen downgraded Evotec SE (EVO) to "hold" from "buy" and reduced its price targets to $2 from $4 and €4 from €7.
Q2 Performance
Preliminary second‑quarter group revenue was €144 million, down 16% year‑over‑year, missing TD Cowen’s internal estimate of €165 million and the consensus estimate of €170 million. The decline was driven by a 15% YoY fall in Discovery & Preclinical/Preclinical Development revenue to €108 million and a 17% YoY fall in Just‑Evotec Biologics revenue to €35 million. Adjusted EBITDA for the quarter was a negative €21 million, compared with a negative €5 million in Q2 2025.
Full‑Year Guidance Revision
Management lowered the full‑year 2026 group revenue guidance to a range of €570 million‑€610 million, representing a 23%‑28% YoY reduction from the prior range of €700 million‑€780 million. The adjusted EBITDA outlook for 2026 was also revised to a negative range of €‑70 million‑€‑105 million, versus the earlier guidance of €0‑€40 million. The company attributes the weaker outlook to persistent customer challenges, revised partnership timelines, delayed partner signings, and slower revenue conversion, with delayed revenue now expected to materialise in Q4 2026 and beyond, largely shifting into 2027.
Outlook and Cost‑Saving Programme
TD Cowen noted that Horizon restructuring targets remain on track, with cost‑saving initiatives aiming for 20%‑30% of €100 million in 2026 and €75 million in annual run‑rate savings by the end of 2027. However, the broker said no update was provided on longer‑term goals of exceeding €1 billion in group revenue and achieving an adjusted EBITDA margin above 20% by 2030.
Revised Revenue Forecasts for 2026‑2028
TD Cowen cut its revenue estimates for 2026, 2027 and 2028 to €595 million, €653 million and €691 million respectively, down from prior estimates of €708 million, €729 million and €767 million. The revisions reflect the weakened near‑term outlook, lack of meaningful near‑term catalysts, and persistent macro‑related headwinds.