Reasons to Add Fresenius Medical Stock to Your Portfolio Now

Fresenius Medical Care AG & Co. FMS is well-poised for growth on the back of strategic acquisitions and partnerships and a solid global foothold. However, a tough regulatory environment remains a concern.Shares of this Zacks Rank #1 (Strong Buy) company have risen 13.4% year to date against the industry’s decline of 7.3%. The S&P 500 Index has decreased 8.7% in the same time frame.The company, with a market capitalization of $15.06 billion, is one of the largest integrated providers of products and services for individuals undergoing dialysis following chronic kidney failure. Its bottom line is anticipated to improve 11.9% over the next five years. FMS’ earnings beat estimates in all the trailing four quarters, delivering an average surprise of 15.67%.Image Source: Zacks Investment ResearchFactors Favoring FMS’s GrowthStrategic Acquisitions & Partnerships: Fresenius Medical has leveraged strategic acquisitions and partnerships to drive its growth strategy. It acquired NxStage Medical for $30 per share, expecting earnings accretion within three years and annual pre-tax savings of $80 million to $100 million. The company’s 2025 growth strategy includes the merger of Fresenius Health Partners, InterWell Health, and Cricket Health to manage 270,000 patients with kidney disease and $11 billion in associated medical costs. Additionally, it expanded its home dialysis market through a distribution deal with JMS Co. Ltd. in Japan and extended agreements with DaVita and Aetna to enhance patient access to home hemodialysis and value-based care.Strong Global Foothold: Fresenius Medical has a strong global presence across North America, Europe (EMEA), the Asia Pacific, and Latin America, expanding through organic growth and strategic acquisitions. It entered the dialysis market in Israel and strengthened its foothold in India by acquiring an 85% stake in Sandor Nephro Services. The company also focuses on public-private partnerships to tap into new markets. Despite pandemic challenges, it has maintained steady organic growth, with significant contributions from EMEA, Asia Pacific, and Latin America, particularly in the third quarter of 2024.Strong Q4 Results: FMS exited the fourth quarter on a strong note, surpassing earnings and revenue estimates, with pricing momentum driving growth in the Care Enablement segment. However, elevated mortality rates may continue to affect sales.The FME25 transformation program delivered EUR 221 million in sustainable savings in 2024, exceeding its target, with total accumulated savings reaching EUR 567 million. Given this momentum, FMS raised its 2025 savings target to EUR 750 million despite expected one-time costs of EUR 700-750 million. Additionally, the company’s divestment of noncore assets is expected to enhance focus on key growth areas and strengthen cash reserves. A Factor That May Offset the Gains of FMSTough Regulatory Environment: Fresenius Medical operates in a highly regulated environment, facing strict legal and antitrust requirements across countries. Non-compliance can result in severe penalties, loss of certifications, product recalls, or even business restrictions. Regulatory changes, especially in reimbursement policies, could impact its business model and strategy. Additionally, international exposure presents challenges in enforcing trade receivables, with some countries' debt issues posing potential risks. While short-term regulatory risks remain low, they could become a medium-term concern.Estimate TrendThe Zacks Consensus Estimate for 2025 revenues is pegged at $21.08 billion, indicating flat year-over-year growth. The consensus mark for earnings is pinned at $2.11 per share, implying growth of 27.1% from the year-ago level. The earnings estimates have improved 19 cents in the past 90 days.Other Key PicksSome other top-ranked stocks in the broader medical space are Masimo MASI, Boston Scientific BSX and Cardinal Health CAH. At present, Masimo sports a Zacks Rank #1, whereas Boston Scientific and Cardinal Health carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.Masimo’s shares have rallied 30.1% in the past year. Estimates for MASI’s 2024 earnings per share (EPS) have increased 1.2% to $4.10 in the past 30 days. MASI’s earnings beat estimates in each of the trailing four quarters, the average surprise being 17.1%. In the last reported quarter, it posted an earnings surprise of 16.6%.Estimates for Boston Scientific’s 2025 EPS have jumped 2.9% to $2.85 in the past 30 days. Shares of the company have surged 56.7% in the past year compared with the industry’s growth of 12.5%. BSX’s earnings surpassed estimates in each of the trailing four quarters, the average surprise being 8.25%. In the last reported quarter, it delivered an earnings surprise of 7.69%.Estimates for Cardinal Health’s fiscal 2025 EPS have increased 1.5% to $7.94 in the past 30 days. Shares of the company have gained 15.2% in the past year against the industry’s 4.1% decline. CAH’s earnings surpassed estimates in each of the trailing four quarters, the average surprise being 9.6%. In the last reported quarter, it delivered an earnings surprise of 10.3%.7 Best Stocks for the Next 30 DaysJust released: Experts distill 7 elite stocks from the current list of 220 Zacks Rank #1 Strong Buys. They deem these tickers "Most Likely for Early Price Pops."Since 1988, the full list has beaten the market more than 2X over with an average gain of +23.9% per year. So be sure to give these hand picked 7 your immediate attention. See them now >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Boston Scientific Corporation (BSX): Free Stock Analysis Report Cardinal Health, Inc. (CAH): Free Stock Analysis Report Masimo Corporation (MASI): Free Stock Analysis Report Fresenius Medical Care AG & Co. KGaA (FMS): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks