Faurecia: Berenberg cuts target price
(CercleFinance.com) - On Friday Berenberg reduced its target price for Faurecia shares from 56 euros to 39 euros, although renewed its buy rating on them.
In its comments, the broker underlines that the automotive supplier's share price - which is now called Forvia following its marriage with the German group Hella - has fallen by about 40% this year - which represents significant underperformance relative to the rest of its sector.
Berenberg points out that, like the automotive industry as a whole, the group has suffered from soaring production costs, the war in Ukraine and the impact of lockdowns in China.
However, the broker also mentions problems that are more specific to the group, having plunged the company into a sort of "vicious circle" that is self-perpetuating.
As such, Berenberg believes that the initiatives taken by the group's management team should help to alleviate concerns about the group's cash position in the ncar term, even if there are unpleasant surprises in terms of business volumes or costs.
The broker believes that this should enables the group to avoid having to make a capital increase - at least in the short term - and at current stockmarket levels, they conclude.
Copyright (c) 2022 CercleFinance.com. All rights reserved.
The information and analyses distributed by Cercle Finance are only intended as decision-making support for investors. Cercle Finance's responsibility may not be entailed, either directly or indirectly following the use of such information and analyses by readers. Any non-professional investor is recommended to consult a professional advisor before making any investment decision. This indicative information in no way constitutes any invitation to sell or buy securities.
In its comments, the broker underlines that the automotive supplier's share price - which is now called Forvia following its marriage with the German group Hella - has fallen by about 40% this year - which represents significant underperformance relative to the rest of its sector.
Berenberg points out that, like the automotive industry as a whole, the group has suffered from soaring production costs, the war in Ukraine and the impact of lockdowns in China.
However, the broker also mentions problems that are more specific to the group, having plunged the company into a sort of "vicious circle" that is self-perpetuating.
As such, Berenberg believes that the initiatives taken by the group's management team should help to alleviate concerns about the group's cash position in the ncar term, even if there are unpleasant surprises in terms of business volumes or costs.
The broker believes that this should enables the group to avoid having to make a capital increase - at least in the short term - and at current stockmarket levels, they conclude.
Copyright (c) 2022 CercleFinance.com. All rights reserved.
The information and analyses distributed by Cercle Finance are only intended as decision-making support for investors. Cercle Finance's responsibility may not be entailed, either directly or indirectly following the use of such information and analyses by readers. Any non-professional investor is recommended to consult a professional advisor before making any investment decision. This indicative information in no way constitutes any invitation to sell or buy securities.