(BFM Bourse) – The German financial intermediary began covering the cable manufacturer’s stock this Tuesday, for purchase, with a price target of 98 euros.
In 2023, Nexans experienced a small drop in tension on the stock market, underperforming its benchmark index, the SBF 120 index. But for Berenberg, the title of the cable manufacturer led by Christopher Guérin deserves a more scintillating stock market performance. The German financial intermediary has therefore initiated purchase coverage of the stock with a price target of 98 euros.
Which largely supports the stock, Nexans gaining 3.7% around 4:50 p.m., the third largest increase in the SBF 120 this Tuesday, behind Alstom (+5.3%) and Euroapi (+3.9%).
The financial intermediary appreciates the efforts made by the management team at the helm of Nexans since 2018, particularly “in improving profitability and cash flow generation”.
Berenberg recalls that the company’s share price fell by around 8% in 2023, while the SBF 120 gained more than 15% over the same period. Nexans’ stock market performance was then penalized by the announcement of potential cancellations of certain offshore wind projects in the United States, recalls the research office.
An “interesting” entry point
This decline in the stock last year offers, according to Berenberg, an “interesting” entry point for investors, especially since the research office says it is “optimistic regarding the long-term prospects of the company” .
Remember that the cable manufacturer presented a new strategic plan in 2021 which should lead it to become a “pure player” (company operating in a single sector of activity, Editor’s note) in electrification by extending the scope of its activities in this area, which will represent between 5.5 billion and 6.5 billion euros in revenue in 2024.
To successfully complete this transformation, Nexans will rotate assets through disposals and acquisitions. This plan should enable the group to generate an Ebitda (gross operating surplus) margin of between 10% and 12% in 2024, compared to 8.9% in 2022.
At the end of October, the company confirmed its objectives for the past year, namely an EBITDA of between 610 and 650 million euros, as well as a normalized cash generation of between 220 and 300 million. These objectives exclude uncompleted acquisitions and disposals.
Sabrina Sadgui – ©2024 BFM Bourse
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