Elis: Deutsche Bank upgrades to buy - raises target price
(CercleFinance.com) - Analysts at Deutsche Bank now recommend investors buy share of industrial launderer Elis, upgrading their previous hold rating.
Alongside this upgrade, they have raised their corresponding target price from from 16 euros to 19 euros.
The broker's report develops several arguments. First, concerns about Berendsen's integration are fading, with "Deutsche" hailing the quality of Scandinavian assets and considering that the UK is in its final year of restructuring. In addition, the price environment is fairly favourable, with Elis having been able for example, to raise its prices in the UK. Finally, the cost of raw materials used by the group has plummeted, including natural gas prices, and, to a lesser extent, that of cotton.
In short, after a first half of 2019 which was tough in terms of results, Deutsche Bank believes that the second half of the year will see a "recovery" that should continue into 2020. The discount relative to its sector that Elis presents in terms of P/E could well turn into a premium.
Copyright (c) 2019 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.
Alongside this upgrade, they have raised their corresponding target price from from 16 euros to 19 euros.
The broker's report develops several arguments. First, concerns about Berendsen's integration are fading, with "Deutsche" hailing the quality of Scandinavian assets and considering that the UK is in its final year of restructuring. In addition, the price environment is fairly favourable, with Elis having been able for example, to raise its prices in the UK. Finally, the cost of raw materials used by the group has plummeted, including natural gas prices, and, to a lesser extent, that of cotton.
In short, after a first half of 2019 which was tough in terms of results, Deutsche Bank believes that the second half of the year will see a "recovery" that should continue into 2020. The discount relative to its sector that Elis presents in terms of P/E could well turn into a premium.
Copyright (c) 2019 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.