Saint-Gobain: against the grain, Barclays is a buyer
(CercleFinance.com) - Believing that investors have sold out the stock, Barclays has upgraded its rating on the Saint-Gobain share to buy ("overweight"), against a previous "weight in line" rating.
The share has therefore become analysts' best pick in its sector, taking the place of CRH. Having increased their target price from 36 euros to 40 euros, this suggests upside potential of over 20%.
Analysts believe that there is a “growing disconnect” between SGO and its peers... "both on earnings expectations and multiples".
According to Barclays, the current consensus implies a lack of organic growth in operating income, in contrast to industry expectations. And while emerging demand should back the trend, and that the comparison basis of H1 will be more favourable, while the price/cost ratio is improving, the broker adds in its note.
"When restated for Sika and we think the stock is pricing in a 2009-style recession, unlike peers," analysts state. In addition, asset disposals made by Saint Gobain could be the “much-needed catalyst.”
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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.
The share has therefore become analysts' best pick in its sector, taking the place of CRH. Having increased their target price from 36 euros to 40 euros, this suggests upside potential of over 20%.
Analysts believe that there is a “growing disconnect” between SGO and its peers... "both on earnings expectations and multiples".
According to Barclays, the current consensus implies a lack of organic growth in operating income, in contrast to industry expectations. And while emerging demand should back the trend, and that the comparison basis of H1 will be more favourable, while the price/cost ratio is improving, the broker adds in its note.
"When restated for Sika and we think the stock is pricing in a 2009-style recession, unlike peers," analysts state. In addition, asset disposals made by Saint Gobain could be the “much-needed catalyst.”
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.