Linde: share shines, with a 'resilient' profile
(CercleFinance.com) - The Linde share is the biggest winner in the German DAX index on Wednesday in a rebound session, with analysts highlighting the industrial gas group's defensive profile.
Although the share has fallen by over 20% y-t-d, Liberum analysts say, this is because of the fears surrounding the group's exposure to the energy sector, which alone represents half of its orders.
However, in 2009, i.e. at the height of the crisis, Linde's operating profit only fefll by 10%, argues the British broker, which mentions the business' similar resistance during the recessions of 1991 and 2001.
Liberum explains that contract cancellations are extremely rare within the sector - due to the financial penalties they cause - and that it is not uncommon for factory projects to take 20 years to materialise.
The broker also considers its share buybacks and synergy programs to be "promising," in addition to synergies from its merger.
The broker therefore has a target price of 196 euros for the share - it is currently up around 3% in Frankfurt.
Copyright (c) 2020 CercleFinance.com. All rights reserved.
Although the share has fallen by over 20% y-t-d, Liberum analysts say, this is because of the fears surrounding the group's exposure to the energy sector, which alone represents half of its orders.
However, in 2009, i.e. at the height of the crisis, Linde's operating profit only fefll by 10%, argues the British broker, which mentions the business' similar resistance during the recessions of 1991 and 2001.
Liberum explains that contract cancellations are extremely rare within the sector - due to the financial penalties they cause - and that it is not uncommon for factory projects to take 20 years to materialise.
The broker also considers its share buybacks and synergy programs to be "promising," in addition to synergies from its merger.
The broker therefore has a target price of 196 euros for the share - it is currently up around 3% in Frankfurt.
Copyright (c) 2020 CercleFinance.com. All rights reserved.