Citi Upgrades Amplifon to 'Buy' on Hearing Aid Market Recovery, Margin Outlook

Citi analysts have upgraded Amplifon SpA to 'Buy' from 'Neutral,' citing a compelling entry point for the Italian hearing aid retailer after a significant year-to-date stock decline. The bank set a new 12-month price target of €16.50 for the company and initiated a 30-day positive Catalyst Watch ahead of its second-quarter results, due July 30.

Amplifon's stock has shed 21% so far this year, underperforming competitors Demant and Sonova as well as the broader European MedTech index. According to Citi, this underperformance has created an attractive investment opportunity.

Rationale for the Upgrade

The bank's more optimistic stance rests on three core pillars that are expected to drive the company's performance:

• Accelerating Market Growth: Citi's discussions with market participants and industry data suggest global hearing aid market growth is trending toward approximately 4% in 2026, a notable pickup from the 2%-3% average seen in 2024-2025. A proprietary Citi survey of U.S. audiologists supports this, indicating an expected acceleration in the U.S. private market to 3.5% for the full year.
• Near-Term Margin Expansion: Analysts anticipate Amplifon's profitability will expand ahead of consensus estimates, driven by the company's "Fit4Growth" cost initiatives and the recent divestiture of lower-margin businesses in the U.K. and India.
• Acquisition-Led Earnings Growth: The future integration of the GN Hearing acquisition is now factored into Citi's model and is projected to be significantly accretive to Amplifon's earnings per share by 2029.

Above-Consensus Forecasts

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Citi's financial estimates for Amplifon are notably more bullish than the market consensus. The bank projects second-quarter 2026 adjusted EBITDA of €159 million, which is 5%-6% above the Visible Alpha consensus of €151 million. This implies an EBITDA margin of 26.3% versus the consensus view of 24.8%.

For the full year, Citi forecasts adjusted EBITDA of €575 million, compared to a consensus of €563 million. The bank also estimates the GN Hearing deal could be approximately 15% accretive to earnings per share by 2029, driven by up to €100 million in potential procurement savings.

Valuation and Price Target

On Citi's estimates, Amplifon trades at a 2027 enterprise value-to-EBITDA (EV/EBITDA) multiple of 7.3x, a significant discount to peers Demant (11x) and Sonova (approximately 12x).

Citi's €16.50 price target is derived from a 9.5x EV/EBITDA multiple applied to its 2028 forecasts. The analysts noted that this multiple still represents a roughly 25% discount to peers, reflecting Amplifon's higher concentration in retail sales and the execution risks associated with integrating the GN Hearing business.