Getinge Earnings: Short-Term Margin Pressure’s Disruption on Growth Is Limited; Maintaining FVE

Narrow-moat Getinge reported mixed fourth-quarter results with robust top-line growth exceeding our expectations and a moderate margin decline. We are maintaining our SEK 247 fair value estimate as incremental revenue growth from recent acquisitions is offset by our lower expected margin expansions. We think the 12% stock price decline following the earnings announcement is an overreaction to Getinge’s near-term margin pressures. In the long term, Getinge’s narrow moat remains intact as the massive installation base among sterilization and life sciences customers supports the company’s high switching costs.