Nexity: AlphaValue downgrades stock
(CercleFinance.com) - On Monday AlphaValue downgraded Nexity shares to "sell" from "reduce", while lowering its target price for them to E16.
5 (from E23.2).
In a report, the analyst explains that he believes investors are tending to underestimate the adjustment that the French property development sector is currently undergoing, a movement similar to that experienced by other European countries, at a time when there is no sign of a turnaround in interest rates before the second half of next year.
"To be clear, we are very nervous about the 2024-25 horizon and have cut our EPS forecasts further", it adds, believing that the 8% operating margin achieved last year will not be repeated this year.
AlphaValue says that Nexity will have to make a trade-off between its volume of business and its level of operating profitability in order to keep its results afloat.
The broker also considers that the dividend of E2.50 per share paid for FY 2023 does not seem sustainable any more.
Copyright (c) 2023 CercleFinance.com. All rights reserved.
5 (from E23.2).
In a report, the analyst explains that he believes investors are tending to underestimate the adjustment that the French property development sector is currently undergoing, a movement similar to that experienced by other European countries, at a time when there is no sign of a turnaround in interest rates before the second half of next year.
"To be clear, we are very nervous about the 2024-25 horizon and have cut our EPS forecasts further", it adds, believing that the 8% operating margin achieved last year will not be repeated this year.
AlphaValue says that Nexity will have to make a trade-off between its volume of business and its level of operating profitability in order to keep its results afloat.
The broker also considers that the dividend of E2.50 per share paid for FY 2023 does not seem sustainable any more.
Copyright (c) 2023 CercleFinance.com. All rights reserved.