Spanish Stocks: Grifols (GRF) Shares Plummet 35% on Profit Decline
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Spanish Stocks: Grifols (GRF) Shares Plummet 35% on Profit Decline

Story Highlights

The Spanish pharmaceutical manufacturer Grifols posted lower annual profits for 2023, causing its shares to decline by 35%.

In news on Spanish stocks, Grifols SA (ES:GRF) plummeted by 35% after its profits declined by 71% to €59 million in 2023, against analysts’ forecast of €162 million. Profits were impacted by one-off expenses of €147 million, primarily attributed to restructuring costs.

For the full year 2023, the company reported an 11% jump in revenues, on a constant currency basis, to €6.59 billion. Adjusted EBITDA came at €1.47 billion, marking an increase of 26% over last year on a constant currency basis.

Grifols is a leading healthcare company involved in plasma-derived medicines and other biopharmaceutical solutions.

The Share Price Plunge Continues

The results came as a severe hit to Grifols shares following last month’s news of a short seller report. In January, GRF stock faced market turbulence due to allegations by short seller Gotham City Research about the authenticity of the company’s financials. Grifols denied the accusations and took a firm stance against the short seller. Year-to-date, GRF stock has lost 49% of its value in trading.

Analyst James Gordon from J.P. Morgan believes that Thursday’s downturn in the stock may have been triggered after the company stated that the results were not audited yet. Although it added that the accounts will be prepared by March 8.

2024 Guidance

For 2024, Grifols expects revenue growth of 7% at constant currency, primarily driven by the strength in the Biopharma business, with an expected growth of 8% to 10%. Adjusted EBITDA is expected to be around €1.8 billion in 2024.

Analyst Tom Jones from Berenberg sees €1.8 billion of EBITDA guidance as a cautious projection, in line with the company’s practice of revising financial forecasts as needed. Meanwhile, Charles Pitman of Barclays thinks the guidance was “slightly underwhelming.”

Is Grifols Stock a Good Buy?

According to TipRanks’ consensus forecast, GRF stock has a Moderate Buy rating based on two Buy and two Hold recommendations. The Grifols share price target is €17.25, which is 128% above the current trading level.



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