(BFM Stock Exchange) – The German bank has initiated its coverage for purchase, judging its attractive stock market discount while the cable manufacturer will complete his moult to become a complete electrification player by yielding activities.

Nexans remains the story of a successful but incomplete transformation. In 2021, the cable manufacturer decided to become a “pure player” of electrification, refocusing its activities on production, use and electricity networks to improve its profitability. The idea defended by the director general, Christopher Guérin, was to specialize so as not to become “the cable kodak”.

Result: the gross operating result (EBITDA) of Nexans almost doubled (804 million euros last year against 463 million in 2021), as is its stock market course.

The group has gone through asset rotations, that is to say transfers and especially acquisitions, to make its moult, which is therefore unfinished. If the company has sold certain activities outside electrification, especially in telecoms or the gas and oil industry, others (automobile, industry) are still present in its lap.

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Asset rotations that will create value

The end of this process should however accelerate, this year, which is one of the sources of optimism of Deutsche Bank.

The German bank began its coverage of action on Tuesday on Tuesday with purchasing advice. Its price of course, of 131 euros, grants a potential of 37% to the action, during the closing course on Monday. At the end of the afternoon, the action climbs 5.8% at the Paris Stock Exchange.

The German bank notes that Nexans should reduce its activity portfolio not linked to electrification this year to bring it to 10% of its income. Which will go through business sales. The products taken from these sales will be redirected to the power supply cables, activities on which “growth and profitability are more attractive”, explains Deutsche Bank.

The establishment evokes potential targets in “network cables or buildings” which could allow the company to generate synergies.

“Nexans is used to carrying out roller acquisitions and successfully integrated them. Nexans’ strategy consists in targeting local or medium -sized local/regional businesses which help it consolidate its presence on specific markets, thus reducing the combined cost base”, recalls on this last point Deutsche Bank.

These asset rotations associated with the good prospects of the company, especially in the high underwater voltage, brings Deutsche Bank to count on an average annual increase in gross operating profit of 7.5% between 2025 and 2028 to reach 1.07 billion euros. These forecasts are significantly superior to consensus.

In view of these perspectives, Nexans evolves to attractive multiple valuation, advances Deutsche Bank. The title is clearly below its records affected in the fall of 2024 and accuses a discount of 59% compared to its sector (industrial equipment goods) on the basis of the gross operating result expected this year.