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Tarkett: Bryan Garnier still a buyer; target adjusted to 38

(CercleFinance.com) - After participating in a road show with Tarkett's management, Bryan, Garnier & Co.
remains a buyer of the share of the French flooring specialist. Pricing will be the key factor in 2018, the broker said, which has however trimmed its target price from 40 euros to 38 euros. This suggests 28% upside potential.

Following their interview with CEO Glen Morrison, analysts retain a certain caution: "organic growth is unlikely to be as strong in 2018 as it was in 2017," i.e. 4.8% over the fiscal year, including over 6% in H2. Bryan Garnier is adjusting its own forecasts accordingly.

In this environment, the group remains more than ever focused on pricing, especially in EMEA (Europe, Middle East, Africa) and NAM (North America), as price increases have already been implemented in the CIS region (i.e. the former USSR), the broker underlines in its research report. This is in order to offset the rising costs of raw materials. Management is confident about this, Bryan Garnier reports, which should prevent any deterioration in the group's adjusted EBITDA margin. Finally, acquisitions remain possible.

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