Aperam: Morgan Stanley upgrades stock
(CercleFinance.com) - Morgan Stanley raised its recommendation on Aperam to "overweight" on Tuesday (from "equal weight", having increased its target price for the share from 46 euros to 51 euros.
In a report on the European stainless steel sector, the broker says it now prefers Aperam shares (at the expense of Acerinox) - it downgraded its rating on the latter to "equal weight".
Morgan Stanley argues that Aperam has been the worst performing European steelmaker in the past year, which has driven its valuation multiples to levels that it considers to be too low, even given its very large European presence.
The analyst adds that the group's recent investments, combined with increased working capital, point to resilient earnings and a strong cash flow conversion rate as the economic cycle tends to normalise.
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