(News Bulletin 247) – Deutsche Bank on Friday raised its recommendation on Veolia shares, raised from ‘hold’ to ‘buy’, citing in particular valuation issues.
The design office, which also raises its target from 24 to 33 euros, recognizes that the environmental services group could be a victim of the economic slowdown, but says it is confident in the trajectory of its results.
The analyst also believes that the company could benefit from inflationary pressures, since nearly 70% of its contracts, particularly with municipalities, are indexed to inflation.
And although only 15% of its turnover comes from cyclical businesses, the Veolia share has recently behaved like a cyclical value, argues Deutsche Bank, which attributes this phenomenon to the good resistance of the European economy and the decline in energy prices.
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