Redburn has initiated coverage of Mettler-Toledo with a Sell rating and a $1,200 price target, implying roughly 15% downside from the precision-instrument maker's latest close of $1,405.
The brokerage projects Mettler-Toledo's 2025 revenue at $4.03 billion, rising to $4.25 billion in 2026 and $4.44 billion in 2027. Adjusted diluted EPS is forecast at $42.73 for 2025, $47.29 for 2026, and $51.40 for 2027. The company's valuation of about 27 times its 2027 expected earnings underpins Redburn's cautious stance, with the brokerage noting that its estimates remain 1% to 3% below consensus on an adjusted EPS basis through 2029.
Redburn highlights Mettler-Toledo's strong operational metrics, including a return on invested capital of approximately 28%, described as best-in-class. The company's adjusted EBITA margins are projected to expand gradually, reaching 31.4% by 2029. Share buybacks are expected to contribute roughly 300 basis points to EPS growth over the medium term.
Segmentally, laboratory operations account for 56% of revenue, supported by precision balances, pipettes, and analytical instruments. The industrial segment represents 39% of revenue and is expected to grow at a 3.9% compound annual rate from 2026 to 2029. Process analytical technology is estimated to expand at about 13%, while core laboratory and weighing markets grow at 3% to 4% annually. Service revenue, now 25% of group revenue, has increased from 23% in 2023.
Geographically, China contributes 16% of revenue, exceeding the 10% peer average, a factor Redburn flags as a potential risk amid regional economic uncertainties.
