(CercleFinance.com) – Royal Bank of Canada renewed its ‘outperformance’ opinion on Vinci on Monday, with a target price of 110 euros showing an upside potential of 20%.
The Canadian broker – which welcomes the ‘solid’ first-half results published by the French group – points out that investors are generally positive about the stock, but that some are expressing doubts about the advisability of creating value in the field of renewable energies.
The financial community is also concerned about the impact of inflationary pressures on the profit margins of construction activity, he argues.
In its note, RBC says it expects the stock to generate a ‘double-digit’ shareholder payout over the next five years, as it currently trades on a 2023 Enterprise Value to EBITDA ratio of 7x, to be compared with an average of 9x.
The broker continues to make Vinci its preferred value (‘top pick’) in the field of transport infrastructure, citing a ‘diversified and resilient group, offering good protection against inflation and less sensitivity to rising bond yields ‘.
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