Vallourec: Oddo confirms rating and target price
(CercleFinance.com) - Oddo has confirmed its buy rating on the Vallourec stock, along with its target price of 8 euros.
Thanks to its Transformation Plan, coupled with also better sector conditions, the group has stronger earnings growth profile, with its EBITDA expected to improve by 150 million to 200 million euros p.a., with the group expected to reach break-even in terms of EBITDA in 2019 and a positive free cash flow from 2020, the broker says in its daily equity report.
The broker's analysts believe that the Transformation Plan that was implemented at the start of 2016 is completely changing the group's scope, with, in addition to its cost reduction program, a profound industrial restructuring, with the group aiming to reduce its production capacity in Europe (-50%).
Overall, the plan aims to improve the group's Ebitda by 750 million euros by 2020. Based on market conditions returning to their level seen in 2014 (in terms of price/volumes, etc.), a more ambitious target for Ebitda of 1.2 billion to 1.4 billion euros is being considered by management, a scenario that has not been retained, Oddo points out.
Copyright (c) 2018 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.
Thanks to its Transformation Plan, coupled with also better sector conditions, the group has stronger earnings growth profile, with its EBITDA expected to improve by 150 million to 200 million euros p.a., with the group expected to reach break-even in terms of EBITDA in 2019 and a positive free cash flow from 2020, the broker says in its daily equity report.
The broker's analysts believe that the Transformation Plan that was implemented at the start of 2016 is completely changing the group's scope, with, in addition to its cost reduction program, a profound industrial restructuring, with the group aiming to reduce its production capacity in Europe (-50%).
Overall, the plan aims to improve the group's Ebitda by 750 million euros by 2020. Based on market conditions returning to their level seen in 2014 (in terms of price/volumes, etc.), a more ambitious target for Ebitda of 1.2 billion to 1.4 billion euros is being considered by management, a scenario that has not been retained, Oddo points out.
Copyright (c) 2018 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.