Saint-Gobain: Oddo confirms rating before sales published

(CercleFinance.com) - Oddo confirms its buy rating on the Saint-Gobain share, along with its target price of 45 euros.


The analyst said that Saint-Gobain is more than ever the broker's top pick in its sector, representing strong potential for a rerating. It is also trading at a discount of over 40% relative to its peers, which represents an historic peak.

The US Lone Star fund appears to be in pole position to buy Saint-Gobain's distribution business in Germany. The amount of the deal is expected to be in the upper part of a range of 300 million to 400 million euros, Oddo says.

We continue to think that the sale of underperforming assets will significantly exceed the target of 3 billion euros in sales. In all, we estimate additional sales to be divested of over 4 billion euros with a total positive impact of 120 bps (vs. 40 bp reported by the group) on the operating margin between 2019 and 2020, Oddo states in its daily equity report.

The group will publish its Q1 2019 figures after trading on Thursday 25 April. Analysts expect a sales to reach 10.1 billion euros, up 3.8% LFL, with a price effect of 2.0% (vs. consensus of +4.2% in Q1, including 2.6% in prices), the broker adds.



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