(News Bulletin 247) – RBC reiterated on Tuesday its recommendation to ‘overweight’ the Vinci share, with a new price target of 125 euros, against 110 euros previously, showing an upside potential of 14%.
In a research note, the Canadian broker justifies raising its target by the better-than-expected 2022 annual results published by the French construction and concessions giant, as well as by the stake in the capital of the Mexican airport group OMA.
RBC notes that investors are generally positive about Vinci, but some are skeptical about the potential for value creation in renewable energy.
While praising the ‘resistant’ and ‘diversified’ status of the French group, the broker points out that investors are worried about the impact of inflationary pressures on its construction activity, despite the optimistic forecasts for 2023 provided by the management team.
In terms of valuation, the professional points out that the stock is traded on the basis of 8x its Enterprise Value/Ebitda ratio by 2024, i.e. a discount compared to its historical average of 9x.
The stock remains its preferred value (‘top pick’) within the transport infrastructure sector.
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