An Undervalued Stock to Buy Now and Hold for the Long Term

This is a transition year for Fresenius Medical Care : The largest dialysis company is facing some headwinds, including weak US treatment growth and investments from a new product launch. But we’re positive on this narrow-moat company’s stock for the long term. With low- to mid-single-digit revenue growth, further margin expansion, and share repurchases, we view high-single-digit annualized earnings growth as possible through 2030. And the stock offers a 3.5% dividend yield today, so investors will get paid to wait. This stock trades 39% below our $38 fair value estimate. Fresenius was one of Morningstar Chief US Market Strategist Dave Sekera’s stock picks on a recent episode of The Morning Filter podcast, 5 Stocks to Buy Before They’re Not Undervalued Anymore.

Fresenius Medical Care treats patients with end-stage renal disease, primarily through its dialysis clinic network and related medical technology. Its strengths in these related areas help Fresenius maintain the leading global position in this market. Even with the threat of obesity drug expansion, we expect the company to benefit from decent demand in developed markets and even faster expansion in emerging markets. With global patient growth expected to remain in the low to mid-single digits in the long run, we expect Fresenius’ top line to grow in the midsingle digits for the next five years. The company continues to boost its operating margins from a low base, which could positively influence its profit growth trajectory.

Key Morningstar Metrics for Fresenius Medical Care

• Fair Value Estimate
  : $38
• Star Rating
  : 4 Stars
• Economic Moat Rating
  : Narrow
• Uncertainty Rating
  : High

Economic Moat Rating

The company’s moat sources are intangible assets and efficient scale, primarily from its service business. Fresenius has built the largest network of dialysis clinics in the world over several decades, based primarily on its extensive physician relationships and convenient locations, which positively influence demand for its services. And as one of the two leading dialysis service providers serving about 75% of the US market, Fresenius appears to benefit from efficient scale dynamics, particularly in the local markets it serves.

Read more about Fresenius Medical Care’s moat rating.

Fair Value Estimate for Fresenius Medical Care Stock

Our fair value estimate is $38 per share. After a transition year with multiple headwinds in 2026, we expect Fresenius will continue marching toward its midteens operating margin goal from 11% in 2025. With low- to mid-single-digit revenue growth, further margin expansion, and share repurchases, we view high-single-digit annualized earnings growth as possible through 2030, which supports our undervalued call on the shares.

Read more about Fresenius Medical Care’s fair value estimate.

Risk and Uncertainty

Fresenius Medical Care faces high uncertainty in both the near and long term. The reemergence of previous pressures, like labor or excess mortality, could cut into results. There is a chance that new management may not be able to fully get its hands around the company’s problems and push its margins up to target levels. In the longer run, as new weight-loss drugs become more prevalent, growth in the dialysis population—which can often be triggered by diseases like diabetes, hypertension, and other cardiovascular problems—may be constrained. Future technology could eventually make dialysis services and equipment unnecessary, although we see that as a very long-term concern.

Read more about Fresenius Medical Care’s risk and uncertainty.

Fresenius Bulls Say

• Diversified by geography and business mix, Fresenius should benefit from ongoing growth in treating patients worldwide in the long run.
• Increasing at-home treatment rates could raise demand for the company’s at-home systems and boost how long patients can continue to work and stay on commercial insurance plans, which could positively affect Fresenius’ profitability.
• Through its venture capital arm, Fresenius is investing in new ways to treat patients, aside from more traditional dialysis tools, which could help keep it at the forefront of this market.

Fresenius Bears Say

• With virtually all of its US service profits coming from commercial insurance, the company could see profitability contract in some negative policy scenarios.
• Although no pressure has emerged yet, the 2022 US Supreme Court ruling against DaVita created a loophole that could eventually open the door for pricing pressure in the US commercial insurance market.
• Uncertainty surrounds Fresenius’ ability to boost margins materially in the long run, which will be required to return to economic profitability.

This article was compiled by Susan Dziubinski and Sylvia Hauser. Data as of March 3, 2026, close unless otherwise noted.