Reasons to Hold Fresenius Medical Stock in Your Portfolio for Now

Fresenius Medical Care AG & Co. FMS is well-positioned for growth, backed by strategic acquisitions and partnerships, as well as a solid global foothold. However, rising costs remain a concern.Shares of this Zacks Rank #3 (Hold) company have gained 3.3% year to date compared with the industry’s 2% growth. The S&P 500 Index has decreased 18.7% in the same time frame.The company, with a market capitalization of $13.8 billion, is one of the largest integrated providers of products and services for individuals undergoing dialysis following chronic kidney failure. Its bottom line is anticipated to improve 13.8% over the next five years. FMS’s earnings beat estimates in all the trailing four quarters, delivering an average surprise of 7.9%.Image Source: Zacks Investment ResearchReasons Favoring FMS’s GrowthStrategic Acquisitions & Partnerships: FMS has been steadily using acquisitions and partnerships to strengthen its core kidney-care business and support long-term growth. In 2024, most of its deal spending went toward buying key assets from a medical technology company, building on its history of acquiring dialysis clinics and care facilities. Earlier moves, like the 2019 purchase of NxStage, which expanded its home-dialysis offerings, and the 2022 merger of Fresenius Health Partners, InterWell Health, and Cricket Health, are helping FMS push deeper into value-based care, with a goal of managing 270,000 kidney-disease patients by 2025.Partnerships with companies like JMS in Japan, DaVita, and Aetna further broaden its reach in home therapies and coordinated care. Altogether, these acquisitions and alliances support the company’s FME25 transformation plan, sharpen its focus on high-margin renal care, strengthen its digital capabilities, and contribute meaningfully to revenue and profit growth.Strong Global Foothold: Fresenius Medical has built a strong global footprint across North America, EMEA, Asia Pacific, and Latin America through a mix of organic expansion, targeted acquisitions, and public-private partnerships that continue to widen its dialysis services reach. Its recent entry into Israel and the purchase of an 85% stake in India’s Sandor Nephro Services further reinforce this international network, which now includes 3,624 clinics caring for more than 308,000 patients.While the company faced pandemic-related disruptions and top-line pressure from portfolio divestitures, overall performance remained resilient, supported by solid contributions from markets outside North America and a 2.1% same-market treatment growth rate in the second quarter.Strong Q3 Results: FMS exited the third quarter on a strong note, with its earnings and revenues surpassing their respective Zacks Consensus Estimate. Overall pricing momentum also supported growth in the Care Enablement segment.Per management, during the third quarter, the FME25 transformation program continued its positive momentum, delivering EUR 47 million additional sustainable savings while related one-time costs, treated as special items, amounted to EUR 41 million. The company confirmed its full-year target of around EUR 180 million in additional annual savings, totaling EUR 1050 million by 2027-end.A Factor That May Offset FMS’s GainsRising Costs & Business Optimization Hurt Short-Term Prospect: Fresenius Medical continues to face a challenging labor environment, with workforce-related costs rising by EUR 150–200 million even as conditions begin to show modest improvement, reflecting the company’s ongoing investment in staffing. Inflation added another EUR 100–150 million in expenses, particularly affecting the supply chain and operational functions.Treatment volumes were lower year over year as of Dec. 31, 2024, mainly because of clinic divestitures tied to the Legacy Portfolio Optimization effort, which reduced overall treatment activity. In the United States, ending certain lower-margin acute care contracts contributed to a slight 0.2% decline in Same Market Treatment Growth, adding to the impact of divestitures, while unfavorable currency movements created additional financial pressure.Estimate TrendThe Zacks Consensus Estimate for 2025 revenues is pegged at $22.48 billion, indicating 7.5% year-over-year growth. The consensus mark for earnings is pinned at $2.22 per share, implying growth of 33.7% from the year-ago level.Key PicksSome better-ranked stocks in the broader medical space are Intuitive Surgical ISRG, Medpace Holdings MEDP and Boston Scientific BSX.Intuitive Surgical, sporting a Zacks Rank #1 (Strong Buy) at present, posted third-quarter 2025 adjusted earnings per share (EPS) of $2.40, exceeding the Zacks Consensus Estimate by 20.6%. Revenues of $2.51 billion topped the Zacks Consensus Estimate by 3.9%. You can see the complete list of today’s Zacks #1 Rank stocks here.ISRG has an estimated long-term earnings growth rate of 15.7% compared with the industry’s 11.9% growth. The company’s earnings outpaced estimates in each of the trailing four quarters, the average surprise being 16.34%.Medpace, currently carrying a Zacks Rank #2 (Buy), reported third-quarter 2025 EPS of $3.86, which surpassed the Zacks Consensus Estimate by 10.29%. Revenues of $659.9 million beat the Zacks Consensus Estimate by 3.04%.MEDP has an estimated earnings growth rate of 17.1% for 2025 compared with the industry’s 16.6% growth. The company’s earnings beat estimates in each of the trailing four quarters, the average surprise being 14.28%.Boston Scientific, currently carrying a Zacks Rank #2, reported third-quarter 2025 adjusted EPS of 75 cents, which surpassed the Zacks Consensus Estimate by 5.6%. Revenues of $5.07 billion outperformed the Zacks Consensus Estimate by 1.9%.BSX has an estimated long-term earnings growth rate of 16.4% compared with the industry’s 13.5% growth. The company’s earnings beat estimates in each of the trailing four quarters, the average surprise being 7.36%.Free Report: Profiting from the 2nd Wave of AI ExplosionThe next phase of the AI explosion is poised to create significant wealth for investors, especially those who get in early. It will add literally trillion of dollars to the economy and revolutionize nearly every part of our lives.Investors who bought shares like Nvidia at the right time have had a shot at huge gains.But the rocket ride in the "first wave" of AI stocks may soon come to an end. The sharp upward trajectory of these stocks will begin to level off, leaving exponential growth to a new wave of cutting-edge companies.Zacks' AI Boom 2.0: The Second Wave report reveals 4 under-the-radar companies that may soon be shining stars of AI’s next leap forward.Access AI Boom 2.0 now, absolutely free >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Boston Scientific Corporation (BSX): Free Stock Analysis Report Intuitive Surgical, Inc. (ISRG): Free Stock Analysis Report Fresenius Medical Care AG & Co. KGaA (FMS): Free Stock Analysis Report Medpace Holdings, Inc. (MEDP): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks