Bureau Veritas: Barclays upgrades directly to buy
(CercleFinance.com) - Barclays has directly upgraded its sell (“underweight”) rating on the Bureau Veritas share to buy ("overweight").
With broker raising its corresponding target price from 20 euros to 24 euros, this morning the stock is up over 3% on the Paris Stock Exchange, at around 21.5 euros.
Having been critical of Bureau Veritas for a long time, Barclays now gives the group credit where it's due, with "management finally appear to be addressing the sins of its past," the broker says in its report. The main arguments developed include: "quality of earnings is improving," while restructuring costs are falling. The group has a stronger underlying cash flow, while net debt is finally falling, in addiition to a scrip dividend alternative.
Furthermore, "organic growth, which has lagged SGS & Intertek, is at last closing the gap," while the French group is benefiting from the first effects of a recovery at some of its divisions and the signature of contracts. In turn, its margin should follow.
Finally, the Bureau Veritas share is trading at a discount of around 20% relative to its sector in terms of 2020 EV/EBITDA, Barclays says.
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.
With broker raising its corresponding target price from 20 euros to 24 euros, this morning the stock is up over 3% on the Paris Stock Exchange, at around 21.5 euros.
Having been critical of Bureau Veritas for a long time, Barclays now gives the group credit where it's due, with "management finally appear to be addressing the sins of its past," the broker says in its report. The main arguments developed include: "quality of earnings is improving," while restructuring costs are falling. The group has a stronger underlying cash flow, while net debt is finally falling, in addiition to a scrip dividend alternative.
Furthermore, "organic growth, which has lagged SGS & Intertek, is at last closing the gap," while the French group is benefiting from the first effects of a recovery at some of its divisions and the signature of contracts. In turn, its margin should follow.
Finally, the Bureau Veritas share is trading at a discount of around 20% relative to its sector in terms of 2020 EV/EBITDA, Barclays says.
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.