TD Cowen has lowered its recommendation on Evotec SE, moving the stock from a "buy" to a "hold" and cutting its price targets to $2 (from $4) and to (from ). The move follows preliminary results for the second quarter that fell short of both the broker's own forecast and the market consensus, and a material trim to Evotec's full-year outlook.
Evotec reported preliminary group revenue for Q2 at 4 million, a 16% decline year-over-year. That figure missed TD Cowen's estimate of 5 million and the consensus estimate of 70 million.
The company detailed the revenue shortfall by business unit. Discovery & Preclinical/Preclinical Development revenue fell 15% year-over-year to 8 million, while Just - Evotec Biologics revenue declined 17% year-over-year to 5 million.
Management cut full-year 2026 group revenue guidance to a range of 70 million to 10 million, a reduction of 23% to 28% year-over-year from the prior guidance band of 00 million to 80 million.
TD Cowen attributed the downward revision to what it described as "persistent customer challenges impacting the growth outlook previously expected in H2:26," pointing to altered partnership timelines, later-than-expected signings of new partners and slower conversion of contracted work into revenue.
Company management indicated that the revenue deferred from earlier expectations will now be recognized in the fourth quarter of 2026 and beyond, with the bulk of that revenue pushed into 2027.
Alongside the revenue cut, Evotec lowered its full-year 2026 adjusted EBITDA guidance to a range of negative 0 million to negative 05 million, down from a prior range of 0 to 0 million. TD Cowen noted the weaker EBITDA outlook reflected pushback on anticipated milestone payments, which traditionally carry higher margins.
Evotec's preliminary second-quarter adjusted EBITDA was reported at negative 1 million, compared with negative million in the second quarter of 2025.
On cost control, TD Cowen reported that management confirmed the Horizon restructuring targets remain on track. Those targets include cost savings of 20% to 30% of 0 million in 2026 and 5 million in annual run-rate savings by the end of 2027. The company did not provide an update to its longer-term targets, which had included achieving more than billion in group revenue and an adjusted EBITDA margin above 20% by 2030.
Reflecting the revised near-term outlook, TD Cowen lowered its revenue forecasts for the next three years. The broker now models 2026 revenue at 595 million (previously 08 million), 2027 at 53 million (from 29 million) and 2028 at 91 million (from 67 million). TD Cowen said the adjustments were driven by "the weakened near-term outlook, lack of meaningful near-term catalysts, and persistent headwinds tied to broader macro challenges."
Market and sector implications
- Biotech services and contract research segments are directly impacted by timing shifts in partner programs.
- Capital markets and equity analysts must reassess near-term earnings and cash-flow expectations for companies with milestone-driven revenue profiles.