Aperam: Deutsche Bank cuts target but remains Buy

(CercleFinance.com) - Deutsche Bank on Thursday renewed its buy recommendation on Aperam shares, expecting the stainless steel manufacturer to report 'solid' fourth-quarter results.


In a research note, the broker explains that it anticipates a sequential improvement in the Group's operating income, thanks to its alloys and recycling activities, but also to a lesser seasonal effect in Brazil.

Although it warns that the "difficult" market environment is likely to persist into 2025, Deutsche Bank believes that the company's outperformance of its main comparables (Outokumpu and Acerinox) shows that its strategy is beginning to bear fruit.

The broker therefore raises its forecasts for 2024, but reduces its estimates for the period 2025-2026, which also leads it to lower its price target from 42 to 40 euros.

'Although Aperam is still challenged by the current cycle, visibility around its solid cash generation (...) and the prospect of a turnaround in 2025 have improved', concludes DB.

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