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Investing.com -- Wall Street turned bearish on Avantor (NYSE:AVTR) with Stifel and Morgan Stanley (NYSE:MS) downgraded the stock to "Neutral" and "Equal-weight," respectively driven by a disappointing first-quarter performance, management changes, and emerging tariff risks.
Avantor reported a 2% decline in first-quarter organic revenue to $1.58 billion, missing Wall Street estimates, with softness across both its Lab Solutions and Bioscience Production segments.
Adjusted EPS matched consensus at $0.23, but revenue and margins fell short of expectations. The company also lowered its top-line organic growth forecast by 200 basis points.
Stifel said the totality of the results and earnings call was worse than the headline numbers suggested, noting lagging growth in bioprocessing, potential market share losses, and uncertainty around pricing strategies to offset tariffs.
The brokerage lowered its price target to $14 from $19, highlighting that although Avantor remains "the cheapest stock in the group, there are too many other high-quality Tools names trading at discounted multiples to favor this one right now.
Morgan Stanley similarly flagged a soft quarter and said tariff downside risk was surprisingly left out of Avantor’s updated outlook, making the stock less "ownable" in the current macro environment.
The firm said Avantor’s valuation is not demanding but warned the stock is likely to remain range-bound until better visibility emerges.
Management announced that CEO Michael Stubblefield will step down once a successor is appointed, with a transition expected by February 2026.
Analysts noted that ongoing leadership changes and restructuring efforts could eventually refresh sentiment but see near-term headwinds persisting.
