Philips: Oddo maintains rating on stock

(CercleFinance.com) - For the second round of bids to acquire the Domestic appliances business, several groups are still in the running according to Bloomberg, including the Chinese group CDH Investments and the Chinese appliance manufacturer TCL Technology Group Corp (in partnership with Citic Capital) along with Hillhouse Capital (an investment fund focused on Asia), Oddo reported this morning.


Philips hopes to complete the Domestic appliances deal in the third quarter of 2021, either as a divestment or an IPO.

Domestic appliances generated sales of 2.3 billion euros in 2019, representing around 12% of total group sales, with an EBITA margin that Oddo estimates at 11%-12%. 2019 sales growth reached 5%.

Domestic appliances could be valued at 2.8-3.3 billion euros. The cash will be used for acquisitions, the analyst says.

Analysts believe Philips is well equipped to capture the future potential of the medical equipment market. However, the medium-term targets recently set by the group seem ambitious in their opinion. Moreover, the consensus is in line with the range (or at the top for the margin) of targets set, they add.

Oddo maintains its neutral rating on the stock with a target price of 45 euros, i.e. its current price.


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