(CercleFinance.com) – Eramet tops the biggest rises in the SBF 120 index on Wednesday on the Paris Stock Exchange, the stock benefiting from an upgrade in recommendation from Oddo BHF, which now has a favorable opinion on the stock .
The action of the mining and metallurgical group is currently jumping more than 12%, while the SBF yields 0.1% in a cautious market before the announcements of the Fed, scheduled for the evening.
Oddo has raised its view on the stock to ‘outperform’ from ‘neutral’ so far, with a price target raised from 86 to 141 euros, representing a potential upside of 54% compared to the closing price of tuesday.
Acknowledging that Eramet’s stock market performance has so far been ‘mixed’ because of a portfolio of activities focused on traditional metals (mainly manganese and nickel), the intermediary believes that the company nevertheless has ‘everything a big’.
According to the analyst, the expected improvement in the economic situation, already perceptible in the prices of raw materials, should enable the group to improve its results from the second half of 2023, before accelerating its performance in 2024 with the start of the lithium activity.
Oddo also points out that Eramet has other attractive projects in energy transition metals, which should support the increase in results and significantly improve its product mix.
‘The financial structure is now very healthy and the visibility on future results satisfactory with the sale of most underperforming activities’, he adds in his note.
“In this context, the valuation seems unfairly discounted compared to peers,” concludes Oddo.
On the stock market, Eramet now shows more than 21% increase since the beginning of the year while the SBF 120 gained 9.2% in the meantime. Over the last three months, the stock price has risen by 45%.
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