Shares of Ambu A/S tumbled more than 9% on Wednesday after Danske Bank downgraded the medical device group, citing intensifying competition and pricing challenges in its urology segment. The stock was trading at 56.75 Danish kroner, down 9.4% from the previous close, and briefly touched 56.25 kroner during the session on the Nasdaq Copenhagen exchange.
Danske Bank analyst Tobias Berg Nissen lowered his rating on Ambu to "sell" from "hold" and slashed the price target to 58 kroner from 70 kroner, according to a report from MarketWire. The new target is the lowest among nine analysts tracked by Bloomberg News.
The downgrade reflects concerns that competition in the urology market has accelerated faster than expected, particularly affecting Ambu's single-use endoscope business. The bank highlighted weak traction for Ambu's ureteroscope, a device used in kidney and urinary tract procedures, as a key factor behind the bearish outlook.
Danske also flagged Ambu's relatively narrow product portfolio as a competitive disadvantage. Unlike larger rivals such as Boston Scientific and Dornier Medtech, Ambu's limited range makes it harder to offer bundled solutions to hospitals, the bank said. This leaves the company squeezed between larger players and lower-cost competitors.
Despite the negative outlook, Ambu has been active in buying back its own shares. The company purchased 314,237 shares between June 15 and June 19 as part of an ongoing buyback program, bringing total repurchases to 1.62 million shares at a cost of 103.0 million kroner. The company has 197.0 million kroner remaining under the program.
The buyback was launched after Ambu's half-year report on May 6, which showed second-quarter organic revenue growth of 7.3%, excluding currency and acquisition effects. The Endoscopy Solutions division posted a solid 13.8% increase, but Anesthesia & Patient Monitoring fell 2.5%, which CEO Britt Meelby Jensen described as "weaker than expected."
Ambu tightened its full-year organic revenue guidance to 10%-12%, down from the previous 10%-13% range, while maintaining its EBIT margin forecast of 12%-14% before special items. The next major catalyst for the stock will be the third-quarter earnings report, scheduled for August 26.
The downside risks remain if urology pricing pressure and weak U.S. contract volumes persist, potentially leading to further analyst downgrades. However, continued growth in endoscopy and ongoing share buybacks could make the recent sell-off seem overdone, according to some market observers.
