The private bank Oddo BHF is updating its list of favorite stocks for the second half of the year, giving priority, given the difficult economic context, to companies experiencing structural growth with pricing power. She raises her price target on Séché Environnement.
Why Séché Environnement remains on Oddo BHF’s list of favorite stocks | Photo credits: Séché Environnement
The private bank Oddo BHF has just updated its list of favorite stocks to take into account “the risk of margin pinching very likely”in a context where the scenario of a recession “becomes believable”. Based on five criteria – pricing power, specific growth factors (acquisition, restructuring, contracts, withdrawal from activities perceived as penalizing), moderate valuation, exposure to the dollar, solid balance sheet -, analyst Jean-François Granjon has selected nine companies: while Séché Environnement, Technip Energies, Imerys and Boiron remain on the list, Euroapi, Interparfums, Ipsos, Spie and Virbac are entering. Conversely, Eurazeo, Scor and Bénéteau are removed from the favourites.
At Oddo BHF, we see Séché Environnement gaining 30% on the stock market. Jean-François Granjon raises the price target on the shares of the French number 3 in the treatment of waste and wastewater from 95 to 100 euros. In particular, he argues that “The start of the year was particularly good with organic growth of 13.7%, including 6.9% for the France scope and 29.5% for the international scope. Even if the group benefited from spot depollution and service contracts (for an amount of 9 million euros), the structural dynamic remains strong. » Why ? Due “regulations for the benefit of the circular economy and decarbonization, treatment capacities [grâce à l’acquisition de l’italien Mecomer] while the overall capacities of the market are limited and volumes are constantly increasing, a pricing power confirmed for both hazardous and non-hazardous waste. » During the health crisis in 2020, in the midst of a recession, the group limited the drop in activity to 2.8%.
In March, despite a complicated context, Séché Environnement presented, when publishing its 2021 accounts, a very engaging roadmap for 2025, with projections higher than those of financial analysts. Turnover is expected to reach nearly 1 billion euros in 2025, which leads to average annual growth of 7%. The gross operating surplus (EBITDA) margin is expected to be between 24 and 25%.
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