(News Bulletin 247) – The Aperam title fell by more than 5% on Friday on the Paris Stock Exchange, victim of a downgrading of recommendation from analysts at Oddo BHF.
In a note released in the morning, the Parisian private bank downgraded its recommendation on the title from ‘neutral’ to ‘underperformance’, with a price target lowered from 41 to 31 euros.
In its study, the firm estimates that the strong prospects displayed by the steelmaker in Brazil will not succeed in compensating for the current weakness in Europe.
Oddo recognizes, of course, that the producer of stainless steels and special steels benefits from strong assets in Brazil, a country which generates some 40% of its gross operating surplus (Ebitda) and which should sustain its trajectory on the coming years.
But the establishment also believes that the current trend is dominated by the weakening of the economy in Europe (60% of EBITDA), a phenomenon exacerbated by intense competition, which leads it to greatly reduce its expectations.
“The generation of solid cash and the financial policy favorable to shareholders remain important assets as well as a satisfactory ESG profile, but they are insufficient to compensate for the lack of visibility on an upcoming turnaround in Europe,” concludes Oddo.
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