Verallia: Stifel still a buyer after BWGI offer

(CercleFinance.com) - Stifel maintains its buy rating and target price of E40.
25 for the stock after the proposed takeover bid for BWGI shares.

The analyst believes that the return to volume growth in Q3 was the first signal of a trend reversal for Verallia.

Rising energy costs could prove to be another trigger in the run-up to 2025. Verallia has demonstrated remarkable margin stability on an upward trend (in absolute terms and relative to its peers) over the last five years of market disruption, supported by annual cost reductions of at least 2% thanks to its PAP and three-year energy hedging program, the analyst says.

Staifel also believes that stable margins have not been rewarded in terms of valuation, which it believes adds to the share's appeal.

Verallia's margins have come under pressure in 2024. We expect progressive margins in 2025 thanks to the combination of improved volumes, the non-recurrence of the negative impact on margins of inventory changes and the potential for reduced energy consumption, Stiffel adds.

The prospect of a potential offer from BWGI has driven up the share price. We believe that the potential offer of 30 E/share is opportunistic, but considerably below our target of E40.25, Stifel says.


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