Avantor

Bull case

Avantor is viewed positively because its turnaround is beginning to show up in operations, with VWR returning to 1.7% organic growth on stronger e-commerce, better service, and share gains, while BMP posted double-digit order growth and a 1.1x book-to-bill. Management has also improved the outlook for FY26, raising organic revenue growth to -0.5% to +0.5% and EPS to $0.80–$0.83, supported by lower share count, modestly lower interest expense, and $500M–$550M of free cash flow guidance. The thesis is further strengthened by signs of a broader end-market recovery in large pharma, biotech funding, and NIH stabilization, which could amplify self-help gains as execution improves.

Bear case

• Avantor is viewed negatively because its growth profile appears structurally weaker than peers, with only ~2% organic growth expected from 2026
• 2028 versus ~5% for the comp group, reflecting a distribution-heavy mix and exposure to wet-lab demand that may be pressured by dry-lab software/AI. Even after 2Q26 revenue beat expectations at $1.692B, organic sales still declined 0.4%, gross margin fell about 120 bps to 31.7%, and adjusted EBITDA margin contracted roughly 160 bps to 15.0%, underscoring limited operating leverage and persistent margin erosion from recent mid-teens levels. The outlook is further weakened by years of failed end-market recovery, ongoing share-loss risk against Thermo Fisher and Merck, and balance-sheet concern with adjusted net leverage at 3.3x, which raises the risk of multiple compression if EPS does not improve in 2027.