Fortrea (FTRE) PT Lowered to $30 at Citi

Citi analyst Patrick Donnelly lowered the price target on Fortrea (NASDAQ: FTRE) to $30.00 (from $42.00) while maintaining a Buy rating.

The analyst comments "On the call, management pointed to 4Q EBITDA margins ranging 11-12% and framed FY25 EBITDA margins in that same range, representing a 30-40% EBITDA dollar increase on FY24. In 2Q, bookings were impacted by elongated biotech decision-making, which resulted in B2B of ~0.96x, though management remains encouraged on the larger pharma pipeline into 2H. Management noted that a B2B of ~1.2x in 2H24 would put them at the higher end of 11-12% EBITDA for 2025. The company expects most of the TSA to be in the rearview by YE24 with some slippage into the beginning of 2025. While bookings missed, we continue to believe that FTRE has margin expansion levers particularly in the outer years, though this is contingent upon improved execution. We update our model, maintain our Buy rating, but lower our TP to $30 from $42 as our numbers move lower."

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