Orpea: SG takes a break; no longer a buyer.
(CercleFinance.com) - Société Générale (SG) is now less optimistic about the French retirement home giant Orpea: as a result, its analysts have downgraded their buy rating on the stock to hold.
SG's report on the stock mentions "Upside potential now limited; trading on demanding multiples". The broker maintains its 12-month target price of 113 euros for the share.
Indeed, in SG's opinion, the group's interim results reflected Orpea's solid business model: furthermore, SG has confirmed its MT financial forecasts for the group.
However, SG is worried about the new dimension taken by the group, whose presence now extends not just to Europe, but also the rest of the world, giving it "a global status". “We believe that Orpea's presence in markets where it has not achieved critical mass, i.e. China, Italy, Poland, the Czech Republic and even Brazil and Portugal, could dent earnings growth in the short term,” SG fears in its report.
Finally, the stock's price has doubled in the past three years, with SG now deeming it expensive.
Copyright (c) 2017 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.
SG's report on the stock mentions "Upside potential now limited; trading on demanding multiples". The broker maintains its 12-month target price of 113 euros for the share.
Indeed, in SG's opinion, the group's interim results reflected Orpea's solid business model: furthermore, SG has confirmed its MT financial forecasts for the group.
However, SG is worried about the new dimension taken by the group, whose presence now extends not just to Europe, but also the rest of the world, giving it "a global status". “We believe that Orpea's presence in markets where it has not achieved critical mass, i.e. China, Italy, Poland, the Czech Republic and even Brazil and Portugal, could dent earnings growth in the short term,” SG fears in its report.
Finally, the stock's price has doubled in the past three years, with SG now deeming it expensive.
Copyright (c) 2017 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.