We take advantage of Biohit's January sale

Translation: Original published in Finnish on 01/16/2026 at 07:00 am EET

Biohit's share price has fallen and the risk/reward ratio has become attractive again. We therefore raise our recommendation to Accumulate (was Reduce) and reiterate our target price of EUR 3.7. The company's outlook has not changed, but we are making minor adjustments to our estimates for the coming years. The revisions have no concrete significance for the valuation. We expect Biohit to continue its defensive profitable growth this year. Uncertainty for the year is caused by the situation in the Middle East and the development of sales receivables.

Healthy growth continues despite Middle East headwinds

Biohit's guidance for 2025 is 15.7-17.1 MEUR in revenue and 10-20% EBIT margin. The top-line guidance represents 10-20% year-on-year growth and is below the lower end of the 15-20% growth target of the company's strategy. The caution is due to the escalating situation in the Middle East, which made H1’25 a disappointment. In connection with its H1 report, Biohit estimated that uncertainty would to some extent begin to ease in the second half of the year.

This year, we expect growth from the recently launched new sample handling product and the new distribution partnerships announced earlier in the year, in addition to sales of the existing product portfolio. Biohit has stated that it looks for a new significant market opening. This opening has been delayed, but could materialize during 2026. Despite known growth drivers and defensive revenue, it is difficult to predict the exact top-line development, so our estimates are subject to considerable uncertainty.

The performance continues at a good level

Biohit's 2024 EBIT margin was 17%, in line with the profitability of mature companies in the industry. Considering Biohit's small size and high growth targets, we believe this is an excellent level, which we expect to be maintained in 2025. Going forward, however, we expect some pressure on profitability. The sales margin of products manufactured and sold by Biohit is significantly higher than that of OEM sales. We expect more growth from OEM sales in the future, which puts pressure on the overall sales margin. Another factor putting pressure on the sales margin is new distribution agreements. We believe it makes sense to distribute relevant products from other manufacturers through Biohit's channels. On the other hand, its profitability is lower than those mentioned above, so the relative increase in sales of distribution products should lead to a decrease in relative profitability.

Marginal adjustments to estimates

We revise our revenue estimates very moderately upward (1-2%) for the coming years. Our earnings estimates also include similar upward revisions. The significance of the revisions for the share’s valuation is negligible.

Valuation turned attractive again

The P/E ratio for the stock is 22x with strong growth projections for 2026. The EV/EBIT multiple, which takes into account the strong balance sheet, is 15x, which is around the midpoint of our estimated fair multiple range of 12x-18x. With the revenue-based EV/S multiple (2025 EV/S: 2.5x) and when viewed from a cash flow perspective, we believe the share is tolerably valued. As the share price has fallen, we believe that the risk/reward ratio has become attractive again.