Alfa Laval: share rises, with RBC optimistic
(CercleFinance.com) - On Wednesday, Alfa Laval shares were one of the biggest winners on the Stockholm Stock Exchange's OMXS30 index, following RBC comments highlighting the crucial role that the engineering group is set to play in data center cooling.
The Canadian broker explains that it expects data centers to move increasingly towards liquid cooling solutions.
It also believes that the Scandinavian heat exchange specialist should also benefit from the resurgence of nuclear power.
We note that these two growth markets - data centers and nuclear power - have until recently represented only niche segments for Alfa Laval, RBC points out.
In its view, these catalysts seem to be ignored by many investors.
In this context, the professional has revised upwards its forecast for Alfa Laval's average annual sales growth to 2035, now expected at 6.4%, up from 5% previously.
It also expects the company's operating margin to improve by 2.4% over the period, compared with +1.75% to date, which leads it to envisage a future revaluation of the share.
As a result, RBC has raised its opinion on the stock from 'performance in line with the sector' to 'outperform', with a price target raised from 450 SEK to 570 SEK.
The stock closed up over 1.5%, making it the fourth-biggest winner on the Swedish blue-chip index.
Copyright (c) 2024 CercleFinance.com. All rights reserved.
The Canadian broker explains that it expects data centers to move increasingly towards liquid cooling solutions.
It also believes that the Scandinavian heat exchange specialist should also benefit from the resurgence of nuclear power.
We note that these two growth markets - data centers and nuclear power - have until recently represented only niche segments for Alfa Laval, RBC points out.
In its view, these catalysts seem to be ignored by many investors.
In this context, the professional has revised upwards its forecast for Alfa Laval's average annual sales growth to 2035, now expected at 6.4%, up from 5% previously.
It also expects the company's operating margin to improve by 2.4% over the period, compared with +1.75% to date, which leads it to envisage a future revaluation of the share.
As a result, RBC has raised its opinion on the stock from 'performance in line with the sector' to 'outperform', with a price target raised from 450 SEK to 570 SEK.
The stock closed up over 1.5%, making it the fourth-biggest winner on the Swedish blue-chip index.
Copyright (c) 2024 CercleFinance.com. All rights reserved.