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Philips: Commerzbank initiates coverage with 'buy'

(CercleFinance.com) - Commerzbank has initiated its coverage of the Philips stock with a "buy" rating and a target price of 40 euros, citing the electronics conglomerate's "successful transformation" into a healthcare company.

In a research report sent to clients, the brokerage firm says the stock's current valuation leaves "room for upside."

Despite the Dutch group now generating 56% of sales in medical technology, targeting professional healthcare customers, this is not reflected in the share's price, which is trading at a discount of 20% compared to European medical technology peers, Commerzbank points out in the report.

The broker also expects the firm's margin expansion to boost earnings growth to well over 10% from 2018.

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