SGS: Oddo BHF still says 'reduce,' but ups target price
(CercleFinance.com) - Oddo BHF reiterates its "reduce" rating on the SGS share, although has raised its corresponding target price from 2300 Swiss francs to 2370 Swiss francs (new downside potential of over 5%), after last week's investor meeting which influenced the broker to slightly adjust its estimates for 2019 (-1%) and 2020 (+2%).
Trading at a 12-month forward P/E of 26x and a premium of 23% relative to its historical average - the highest in the sector - the share's valuation still seems exaggerated for an upturn in performance that we believe will be more visible in the second half of 2020, the analyst comments.
He adds that after a 12% reduction in the 2020 EPS consensus since the beginning of the year and a performance of +15%, SGS will have to deliver on the optimization of its operations and on accretive external growth to deserve this favour.
Copyright (c) 2019 CercleFinance.com. All rights reserved.
The information and analyses distributed by Cercle Finance are only intended as decision-making support for investors. Cercle Finance's responsibility may not be entailed, either directly or indirectly following the use of such information and analyses by readers. Any non-professional investor is recommended to consult a professional advisor before making any investment decision. This indicative information in no way constitutes any invitation to sell or buy securities.
Trading at a 12-month forward P/E of 26x and a premium of 23% relative to its historical average - the highest in the sector - the share's valuation still seems exaggerated for an upturn in performance that we believe will be more visible in the second half of 2020, the analyst comments.
He adds that after a 12% reduction in the 2020 EPS consensus since the beginning of the year and a performance of +15%, SGS will have to deliver on the optimization of its operations and on accretive external growth to deserve this favour.
Copyright (c) 2019 CercleFinance.com. All rights reserved.
The information and analyses distributed by Cercle Finance are only intended as decision-making support for investors. Cercle Finance's responsibility may not be entailed, either directly or indirectly following the use of such information and analyses by readers. Any non-professional investor is recommended to consult a professional advisor before making any investment decision. This indicative information in no way constitutes any invitation to sell or buy securities.