(Boursier.com) — Xilam collapsed by 18.3% to 13.8 euros the day after the announcement of a clear deterioration in its profitability in the first half. Oddo BHF maintains a solid FCF despite profitability under pressure, which should remain so in 2024. The broker lowers its target from 37 to 25 euros in order to reflect the drop in its forecasts at CT (EPS -50% 2023 and 2024) as well as an increase in the risk premium. In a context that is not very obvious for streaming platforms (Xilam’s first clients through Netflix and Disney+ in particular) which tends to weigh on the demand for new animated content, the push towards the teen-adult animation segment, in growth, seems relevant. This should continue to weigh on margins in the short term even if FCF generation will be preserved (it was historically negative at Xilam). Xilam maintains a growth profile with long cycles and visibility on activity (CA: CAGR 2023-26 +12.5% estimated). The analyst remains ‘outperform’ on the stock from a medium-term perspective.
The group announces profitability which has been seriously affected by the evolution of the mix and the increase in fixed costs and its accounting impact, affirms TP ICAP Midcap (‘purchase’). The broker adjusts its 2023-2026 estimates again, integrating a significantly less sustained MopC in 2023 and 2024 before normalization from 2025 on a more balanced model of new production (50/50) and a stabilization of fixed costs… The objective is cut from 34.5 to 24.5 euros.
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