Evotec SE's stock has clawed its way back above the €5 mark, a level that seemed distant just weeks ago. The recent 22% gain over 30 days, pushing the share price to €5.25, signals a shift in sentiment. Investors are beginning to weigh the company's painful restructuring against a compelling long-term thesis: artificial intelligence could become its most powerful client.

Analysts at Berenberg are championing this view, maintaining a €9.70 price target that implies nearly 85% upside. Their logic counters an intuitive fear. While AI-powered drug discovery firms develop candidates cheaply and quickly in-silico, those candidates must eventually enter a physical lab for testing and production. Strategist Christian Ehmann argues Evotec is positioned as the primary beneficiary of this shift, noting the number of new project inquiries has already doubled in 2026. The market, he suggests, underestimates this strategic advantage.

The present, however, remains challenging. For the current year, Evotec has guided for revenue between €700 million and €780 million. Berenberg's forecast sits at the higher end of this range, at approximately €737 million, which would still represent a decline from the €788 million reported for 2025. The adjusted EBITDA is expected to remain negative this year, with the company projecting it may reach just €40 million at best. Management has explicitly labeled 2026 a transition period.

This transition is being driven by the ambitious "Horizon" program. The plan involves a radical consolidation of Evotec's global footprint, reducing sites from 19 to just 10. While this streamlining is expected to yield annual savings of around €75 million by the end of 2027, it comes with a significant upfront cost. The company anticipates total restructuring expenses of approximately €100 million through 2028, with the first operational benefits not expected until the second half of 2026.

A clear divergence in performance is visible within the company. The biologics division, Just – Evotec Biologics (JEB), is a standout success. In 2025, JEB grew revenue by 40% to €259 million and delivered an adjusted EBITDA of €53 million. In stark contrast, the traditional drug discovery segment shrank by 13% to €529 million, posting an adjusted EBITDA loss of €12 million. This highlights the successful scaling of JEB's J.POD manufacturing capacities against broader headwinds.

Fourth-quarter 2025 results offered a mixed picture. Revenue jumped 14% year-over-year to €253 million, while adjusted EBITDA more than doubled to €58 million. A significant portion of this strength, however, was attributed to one-off effects, underscoring the underlying volatility.

Looking beyond the transition, Evotec's medium-term targets are ambitious. The company aims to surpass €1 billion in revenue, targeting annual growth of 8% to 12%. It also expects its adjusted EBITDA margin to climb to 20% by 2028. For now, the stock faces a near-term technical hurdle at its 50-day moving average around €5.20. A sustained break above this level would improve the chart picture, but the fundamental story hinges on converting the surge in AI-driven project inquiries into concrete, recurring revenue.

Ad

Fresh Evotec information released. What's the impact for investors? Our latest independent report examines recent figures and market trends.

Ad

Fresh Evotec's AI information released. What's the impact for investors? Our latest independent report examines recent figures and market trends.