Suez: too expensive for Credit Suisse, it downgrades stock.

(CercleFinance.com) - This morning Credit Suisse (CS) has downgraded its rating on the Suez share from neutral to underperform.


Indeed, CS analysts are skeptical about the group's growth and its earnings outlook. As a result of cuts in its earnings estimates for the group, they have reduced their target price for the share from 14.50 euros to 13.10 euros.

Indeed, the Suez share is up 13% since the beginning of the year, on the expectation that growth in volumes will leverage earnings of the waste division, thanks to the cyclical recovery of the French market. However, CS says in its report that it believes that every 1% increase in tonnages in France only raises the group's operating income by about 1%. Investors should also watch out for the risk of rising tax on waste in the near term in France.

In addition, about half of Suez's operating income is generated outside the euro zone, which exposes the group to negative FX factors. In addition, CS is not impressed either by the group's cash generation or its dividend.


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