Derichebourg: Oddo downgrades stock

(CercleFinance.com) - The analyst believes that the group's recent H1 publication reflected a very strong momentum, with sales up 54.
4% and EBITDA up 45%.

Since then, the environment has changed significantly. On the one hand, the raw materials market has undergone a sharp correction, especially for scrap metal, with a 50% drop in prices compared to the high point in March. In addition, the macroeconomic environment imposes certain caution, especially for industrial companies, with a risk of growth deceleration in 2023 and beyond, Oddo says.

Analysts have however, raised their EBITDA estimates by 9% (+6% for sales) estimating 503 million euros (with 250.6 million euros in H1 and 252.7 million euros in H2). The group's EBITDA margin therefore works out at 9.6% vs. 10.7% YoY, down 110 bp due to the slightly dilutive integration of Ecore.

Oddo estimates 2023 sales of 5,345 million euros (+2% YoY) with EBITDA of 505 million euros (stable), giving a margin of 9.4% (-20bp).

Given the lower visibility and a more risky earnings sequence, Oddo has downgraded its rating on the stock to Neutral (from Outperform) with a target price of 9.0 euros (from 14.5 euros).

The market definitely agrees - the share is currently down almost 7% at 5.9 euros.


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