Evotec Shares Plunge on Restructuring Plan and Weak Outlook

Evotec shares hit a 52-week low as its 2026 revenue and EBITDA guidance disappoints investors, despite reaffirming ambitious 2030 targets.

Investors reacted sharply on Tuesday to Evotec's announcement of its "Horizon" restructuring program and a disappointing financial forecast for 2026. The German biotechnology firm's stock price plummeted by more than 13%, hitting a new 52-week low of €4.38. This price represents a decline of nearly 47% from the annual high recorded in May of last year.

While the plan includes significant job cuts, the primary driver of the sell-off was a revenue projection that fell short of market expectations. For the 2026 fiscal year, the Hamburg-based company anticipates revenues between €700 million and €780 million. This range sits below the preliminary figure of approximately €788 million for the recently concluded year. Even the upper end of the new guidance misses analyst consensus. Furthermore, Evotec expects its adjusted EBITDA to drop to a range of €0 to €40 million this year, down from around €41 million in the prior period. Management explicitly framed 2026 as a transitional year, noting that initial operational improvements are not anticipated until the second half.

Ambitious Mid-Term Targets Remain in Place

Despite the near-term challenges, Evotec's leadership reaffirmed its medium-term ambitions. The company is targeting group revenues exceeding €1 billion by 2030, implying an annual growth rate of 8% to 12%. For 2028, the goal is an adjusted EBITDA margin of 20%, supported by a greater proportion of high-margin, technology-driven revenue streams. The company enters the current year with annualized cost savings of approximately €60 million already realized from the previous year's initiatives.

Analysts at RBC Capital Markets noted no substantial change to these medium-term objectives, maintaining their "Outperform" rating and a €10 price target on the equity. The full annual report for 2025, scheduled for release on April 1, 2026, is expected to provide detailed mid-term targets and will be a key test of this optimistic stance. Until then, the shares are likely to remain under pressure from the weak annual outlook.

"Horizon" Program Details a Radical Overhaul

The "Horizon" initiative marks the latest phase in a multi-stage transformation that began in 2024 with the "Priority Reset." The plan involves consolidating Evotec's global site network down to ten locations and eliminating up to 800 positions. This includes the complete closure of its Munich site. Management projects these measures will yield annual cost savings of about €75 million by the end of 2027. To achieve this, the company will incur roughly €100 million in cash restructuring costs spread between 2026 and 2028, in addition to non-cash impairment charges.

Recent performance highlights the necessity for this restructuring. The core Drug Discovery & Preclinical Development segment showed significant weakness in the 2025 business year, with revenues declining 13% to approximately €529 million. The segment's adjusted EBITDA turned negative. In contrast, the Biologics segment, Just – Evotec Biologics, performed strongly, boosting revenue by about 40% to €259 million and contributing roughly €53 million in EBITDA to support the group's overall figures.