Fresenius Medical Care (FMEG): Goldman Sachs expects soft Q3 treatment growth for Fresenius Medical Care despite an adjusted EBIT beat versus consensus.

Overview

This pre-Q3 2026 earnings update assesses Fresenius Medical Care's treatment-volume recovery, reimbursement pressures and earnings outlook. Goldman Sachs expects a modest adjusted EBIT beat but sees continuing pressure on same-market treatment growth and reduced medium-term earnings estimates, supporting its Neutral rating.

Core views

Goldman Sachs expects another soft quarter for same-market treatment growth (SMTG), forecasting a 1.1% decline in Q3 2026. The institution attributes the weakness to operational headwinds identified in Q2, including an operational miss and a business-development execution gap caused by insufficient referral conversions. It notes that patient outflow improved in Q2, both in mortality and missed treatments, but patient inflows remain the central issue because they drove the deterioration in treatment volumes. Investors are broadly expected to anticipate SMTG softness through the rest of FY2026; the key question is when growth can return to positive, as this affects the valuation multiple and perceptions of terminal growth. The reimbursement backdrop is also becoming less favorable. Goldman Sachs expects Q3 to be the first quarter in several periods without a meaningful contribution from TDAPA tailwinds, estimating an approximately €70 million year-on-year headwind. The full effect of the roll-off from DefenCath and phosphate-binder reimbursement benefits is expected to be more visible in Q4. For the divisions, Goldman Sachs expects Care Delivery's underlying growth to be partly offset by these reimbursement pressures, Care Enablement to deliver mid-single-digit organic growth, and Value Based Care to be approximately breakeven. Despite these operating pressures, Goldman Sachs forecasts Q3 group revenue of €4.924 billion and adjusted EBIT of €524 million, versus Visible Alpha consensus of €505 million, a 3.8% beat. The forecast implies a 10.6% adjusted EBIT margin, 25 basis points above consensus, and adjusted EPS of €1.05 versus €1.04 consensus. The expected EBIT outperformance is concentrated in Care Delivery, where Goldman Sachs forecasts €494 million of EBIT against €436 million consensus and a 14.0% margin versus 12.5%; Care Enablement EBIT is forecast below consensus at €121 million versus €134 million, while Value Based Care is expected to be close to break-even at a €1 million loss. Goldman Sachs modestly revises its longer-term forecasts. Revenue estimates rise by 0.2% for FY2026-28, but adjusted operating-income estimates are unchanged for FY2026 and reduced by 1.4% and 1.8% for FY2027 and FY2028. Adjusted EPS remains €4.21 for FY2026 but is reduced to €4.11 for FY2027 from €4.19 and to €4.97 for FY2028 from €5.11. The revisions reflect FX, recent operating trends and reimbursement dynamics. Goldman Sachs expects adjusted EBIT to decline in FY2026 and FY2027 before rising in FY2028, while organic revenue growth is expected to remain positive from FY2026 through FY2028. The 12-month target price is reduced to €38 from €39, and the Neutral rating is retained. The target is based equally on a DCF value of €35.1 per share and a multiples-based value of €40.8 per share. The DCF uses an unchanged 8.8% WACC and 0% terminal-growth assumption; the multiples method applies an unchanged 9.0x P/E multiple to annualised Q5-Q8 EPS estimates. At the cited €39.20 share price, the new target implies 3.1% downside.

Analysis framework

Goldman Sachs first assesses Q3 operating drivers by division, emphasizing treatment-volume trends, referral conversion and TDAPA reimbursement effects. It then compares its Q3 revenue, EBIT, margin and EPS forecasts with Visible Alpha consensus, revises FY2026-28 financial estimates, and derives its target price from an equal-weighted DCF and P/E-multiple valuation.

Methodology notes

• Valuation methodsDCF (Discounted Cash Flow)

  Blended discounted-cash-flow valuation

  Goldman Sachs assigns a 50% weight to a DCF that values the shares at €35.1 using an 8.8% WACC and 0% terminal growth.

• Valuation methodsP/E and PEG Valuation

  P/E multiple valuation

  The other 50% of the target-price calculation applies a 9.0x P/E multiple to annualised Q5-Q8 EPS estimates, producing a €40.8 per-share value.

• Industry AnalysisVolume-price decomposition

  Treatment-volume and reimbursement analysis

  The report separates treatment-volume trends, referral conversion and reimbursement changes to explain expected growth and margin outcomes across the operating divisions.

Asset mapping & comparison

Structured mapping from thesis to named assets (strengths, weaknesses, peers, risks).

• Fresenius Medical Care (FMEG.DE)

  Primary covered company; Goldman Sachs expects a Q3 adjusted EBIT beat despite weak same-market treatment growth and reimbursement pressure.

  Strengths

  Expected Q3 adjusted EBIT of €524 million is above consensus; Care Delivery EBIT and margin are forecast above consensus; the report highlights strong free-cash-flow conversion and accelerating buybacks from 2025-27.

  Weaknesses

  SMTG is forecast to decline 1.1%, with patient inflow and referral-conversion issues weighing on treatment volumes; Care Enablement EBIT is forecast below consensus.

  Comparison

  Q3 adjusted EBIT is forecast at €524 million versus €505 million Visible Alpha consensus; the DCF value of €35.1 is below the €40.8 multiples-based value.

  Risks

  US dialysis volume may not rebound, Medicare PPS reimbursement may remain low, GLP-1 therapies may reduce the ESRD patient population, Hv-HDF may underperform expectations, and a stake sale is a downside risk.

Key data

• Q3 2026e adjusted EBIT€524m3.8%, or approximately 4%, above Visible Alpha consensus of €505m.
• Q3 2026e SMTG-1.1%Expected to remain subdued as operational and referral-conversion issues persist.
• Q3 TDAPA headwind~€70mForecast year-on-year impact as prior reimbursement tailwinds roll off.
• FY2026e adjusted EPS€4.21Unchanged from the prior estimate.
• FY2027e adjusted EPS€4.11Reduced 2.1% from €4.19.
• FY2028e adjusted EPS€4.97Reduced 2.6% from €5.11.
• 12-month target price€38.00Reduced from €39.00; based on equal DCF and multiples weighting.

Impact & implications

The report expects a near-term earnings outcome above consensus but argues that the more important issue is the timing of a recovery in US same-market treatment growth and the increasing visibility of reimbursement headwinds into Q4 and FY2027. These factors drive the reduced earnings outlook and the lower target price.

Risks

• Upside risks identified by Goldman Sachs are faster-than-expected US dialysis-volume growth, earlier Hv-HDF benefits, favorable policy decisions and easing margin headwinds.
• Downside risks identified by Goldman Sachs are a failure of US dialysis volumes to recover, low Medicare PPS reimbursement, potential GLP-1 effects on the ESRD population, weaker-than-expected Hv-HDF execution and a stake sale.

What to watch

• Q3 2026 results due on 3 November, particularly same-market treatment growth and the patient-inflow trend.
• The scale of initial TDAPA roll-off effects in Q3 and the more pronounced reimbursement headwinds expected in Q4.
• The pace at which SMTG returns to positive growth and its implications for terminal-growth expectations and valuation.
• Care Delivery margins, Care Enablement organic growth, and whether Value Based Care remains around break-even.