CAUTION with Bayer! Is Evotec facing a SLUMP? 123fahrschule stock with 200% POTENTIAL?

123fahrschule: Analysts see more than 200% upside potential

Analysts have reacted positively to the quarterly figures of 123fahrschule and confirmed their "Buy" recommendations. NuWays Equity Research recommends the stock of the digitally driven driving school chain with a focus on e-learning and digital training concepts with a target price of EUR 7.20 and thus sees more than 200% upside potential. The share is currently trading at EUR 2.26. From the analysts' point of view, the third quarter was strong due to continuous growth and improved profitability. The experts are particularly optimistic about the improved operating cash flow, which has increased from quarter to quarter over the year. By way of comparison, while 123fahrschule had generated a positive operating cash flow of EUR 0.4 million for the full year 2023, it had already reached EUR 1.5 million in the first nine months of the current year – and the trend is rising.

Analysts also view the future prospects of 123fahrschule positively. The Company plans to leverage further digitalization of driving education to reduce the cost of obtaining a driver's license by up to EUR 1,000 while simultaneously increasing margins. This strategy should massively increase the Company's market share in Germany. NuWays analysts expect 123fahrschule's revenue to increase by over 50% to EUR 33.4 million in the next two years. EBITDA should be EUR 4.1 million in 2027, and the free cash flow should be EUR 2.5 million. Given the current market capitalization of around EUR 16 million, the valuation appears anything but expensive.

mwb Research also considers the 123fahrschule share inexpensive and worth buying. The Company's use of e-learning and self-developed simulators puts it in a position to benefit from the upcoming market changes and to grow solidly. They see the fair value of 123fahrschule at EUR 6.20, and thus 160% above the current price level. Incidentally, CEO Boris Polenske has also taken advantage of the current price level and bought shares in 123fahrschule.

Evotec: Share price of EUR 4 or EUR 14?

While 123fahrschule is on a solid upward trend, Evotec remains unsettled. The Company is in the midst of a restructuring, a hostile takeover attempt – albeit a short one – caused unrest, the share price is at a multi-year low, and now the COO is also stepping down. Accordingly, Dr. Craig Johnstone will leave Evotec after 12 years, effective December 31, 2024. CEO Dr. Christian Wojczewski stated: "On behalf of the entire Management Board, I would like to thank Craig for his leadership, passion, and commitment to Evotec over the past 12 years. We wish him all the best for the next chapter of his career." No details regarding the reasons for his departure were disclosed. Johnstone's responsibilities will be distributed among the existing management team until further notice.

Evotec's shares have stalled in their attempt to break through the EUR 10 mark. Yesterday, at the time of going to press, they had lost around 2% of their value and were trading at EUR 8.75. This is still too high, at least according to Deutsche Bank. Their analysts rate the biotech company's shares as "Sell" and give a target price of EUR 4. However, there are also significantly more optimistic voices. Warburg Research, for example, recommends the Evotec share as a "Buy" and sees a fair value of EUR 14.

Bayer: Challenging year ahead in 2025?

Analysts remain divided on Bayer, though no sell recommendations are listed on marketscreener.com. Accordingly, 5 analysts recommend the share as a "Buy", and 15 recommend it as a "Hold". Yesterday, JPMorgan reaffirmed its "Neutral" rating for the DAX-listed company with a price target of EUR 25. Analysts point to challenges in the coming year as patents for several key drugs are set to expire. While Bayer has new products in the pipeline, expectations are that 2025 could prove challenging for the pharmaceutical and agrochemical giant.

DZ Bank recommends Bayer shares as a "Buy" but has slashed the target price from EUR 40 to EUR 30. The analysts expect that the DAX company will not be able to maintain its EBITDA margin in the coming year.

At the moment, the Bayer share is not expected to do much. A real breakthrough could only come from a settlement of the legal disputes in the US. In contrast, 123fahrschule is convincing, with solid growth and a favorable assessment. According to analysts, up to 200% price gains are possible. At Evotec, it seems momentum has stalled following the failed takeover attempt.