Wed Sep 25 07:54:36 UTC 2024: ## Fortrea Downgraded by Jefferies Amid Concerns Over Bookings and Market Conditions

**New York, NY** – Financial services firm Jefferies downgraded Fortrea (NASDAQ: FTRE) from “Buy” to “Hold” on Wednesday, lowering its price target to $21 from $25. The downgrade comes amidst concerns about the company’s ability to achieve its targeted margin expansion due to challenging market conditions and pressure on bookings.

Jefferies noted that Fortrea’s revenue growth is crucial for meeting its margin objectives. While the firm expects improved utilization of billable staff and reduced SG&A expenses to contribute to margin improvement, it fears that weak market conditions could significantly impact bookings and, consequently, revenue growth in the coming year.

The firm projects that Fortrea’s bookings will remain around 1.0x for the second half of 2024, which could negatively impact the company’s 2025 EBITDA by approximately 3%. This, coupled with the current market challenges, makes it difficult for Fortrea to reach its targeted EBITDA margin of 11-12% for 2025.

This downgrade follows a series of price target revisions from other analysts after Fortrea’s Q2 2024 earnings report. Deutsche Bank, TD Cowen, Mizuho, and Citi all adjusted their price targets, citing slower-than-expected bookings and a challenging outlook.

Despite the challenges, Fortrea has secured strategic partnerships with top pharmaceutical customers and launched two new offerings. The company has also revised its full-year 2024 revenue guidance to $2.7 billion to $2.75 billion and adjusted its EBITDA target to $220 million to $240 million.

InvestingPro highlights that Fortrea is trading at a high EBITDA valuation multiple, indicating high market expectations for the company’s earnings. While analysts predict Fortrea will be profitable this year, the modest revenue growth over the last twelve months warrants cautious optimism regarding the company’s growth potential.

Investors interested in Fortrea should carefully consider the current market conditions, the potential pressure on bookings, and the challenges in achieving the company’s ambitious margin targets. Further in-depth analysis from InvestingPro can provide investors with a broader perspective on Fortrea and aid in their investment decisions.

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