GEA Group: 'it is time to become more constructive' (SG).

(CercleFinance.com) - Société Générale (SG) has upgraded its sell rating on the German equipment manufacturer for the agri-food industry GEA Group, with the stock having recently been penalised by two profit warnings on results in a row.


"It is time to become more constructive," SG says its report, even though in the near term, pending improvements, a "hold" rating seems to be better. SG has raised its 12-month target price from 30.5 euros to 38 euros.

Indeed, the German group has made two consecutive profit warnings, and the share price has fallen by over 20% in a year. However, regarding the GEA Group share, SG deems that, "most negative news has been priced into the shares. In our view, it is time to become more constructive."

In fact, the markets to which the group is exposed - the agri-food industry and beverages (72% of sales) - “structurally growing end-markets... that limits volatility and should provide at least some pricing power,” SG says.


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