Eramet : BofA reiterates buy, target 100 euros

(CercleFinance.com) - On Monday, Bank of America reiterated its Buy recommendation on Eramet, leaving its target price unchanged at 100 euros.


In a research note, the American investment bank highlights a stock that is "deeply undervalued" (deep value) after its recent correction, attributed to the economic slowdown and China's difficulties.

At its current price levels, the stock is trading at 3.3x its Ebitda forecast for 2025, notes the New York-based firm, compared with an average of around 4.4x during this usual period of the industrial cycle.

With Eramet recently announcing its intention to take full control of the Centenario (Ratones) lithium project in Argentina, BofA calls this a "positive" project, as the mining group will pay around 0.7 times the net book value of an asset that appears largely risk-free.

From its point of view, the main concern remains the possibility of a recovery in lithium prices, a market for which Rio Tinto recently evoked the prospect of "exponential" growth, recalls the bank in its study.

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