Evotec Shares Under Pressure as Financial Forecasts Fall Short

Evotec's 2026 outlook falls short of expectations, prompting a major restructuring. While Biologics booms, core unit struggles. Investors await audited results on April 8.

Investor confidence in Evotec SE is being tested ahead of the company's scheduled release of its audited 2025 annual figures on April 8. Market sentiment has turned cautious following the firm's recently communicated guidance for 2026, which has underwhelmed the investment community.

A Divergent Performance Across Business Units

Preliminary segment results for 2026 reveal a tale of two businesses. The core Drug Discovery & Preclinical Development unit saw revenue decline by 13% to approximately €529 million, with its adjusted EBITDA turning negative. In stark contrast, the Biologics division, Just – Evotec Biologics, posted robust growth. Its revenue surged by about 40% to €259 million, generating an adjusted EBITDA of roughly €53 million and standing as the group's sole profitable operational segment.

This operational imbalance lies at the heart of a major corporate overhaul now underway. Dubbed "Horizon," the restructuring program involves cutting up to 800 positions, shuttering the Munich site, and consolidating global operations around ten key locations. Management anticipates annualized cost savings of around €75 million by the end of 2027. However, this efficiency drive comes at a price, requiring cash restructuring charges of approximately €100 million to be incurred between 2026 and 2028.

2026 Guidance Misses the Mark

The financial outlook for the coming year has been a primary source of disappointment. Evotec projects 2026 revenue in a range of €700 to €780 million. Even the top end of this forecast falls short of the prior year's preliminary result of €788 million. Adjusted EBITDA is expected to be between zero and €40 million, a figure that significantly trails market expert consensus estimates, which had been anticipating over €80 million.

Looking further ahead, the company's medium-term targets are more ambitious. Evotec aims to grow group revenue beyond €1 billion by 2030 and achieve an adjusted EBITDA margin exceeding 20% from 2028 onward. The leadership team expects the first operational benefits from the restructuring to materialize in the second half of 2026.

Despite the challenging forecast, several recent operational milestones offer a counter-narrative. These include a $10 million payment from Bristol Myers Squibb triggered by the start of a Phase 1 study, BARDA-supported Ebola production work, and the sale of the Toulouse site to Sandoz, which holds the potential for future payments exceeding $650 million. To date, these positive developments have failed to reverse the downward trend in the company's equity value. The share price currently trades nearly 47% below its 52-week high of €8.32.

All eyes will be on management's presentation at 14:00 MESZ on April 8, when the final audited numbers will be released and the medium-term strategic framework will be detailed. The critical question for investors is whether Evotec can point to concrete operational progress that credibly supports its path through a seemingly weak 2026.