(Finance) – Bank Profile he lowered the target price (to 8 euros per share from 11.9 euros) and confirmed the recommendation (Buy) on the title Coflea group listed on Euronext Growth Milan and active in the sector of command systems and control cables for the off-road vehicles sector, after lower-than-estimated guidance for the 2024 financial year and the cost saving and reshoring plan.
The broker has cut estimates FY24 revenue of 9% (-6.6% year-on-year) due to the downturn in the agricultural machinery market, which worsened. For the next few years, apart from OE, it has kept its growth assumptions unchanged, concluding with a cut in turnover estimates of 12% in FY25-26.
It forecasts FY24 adjusted EBITDA at €7.6 million or a margin of 12.7%, slightly above midpoint guidance (compared to the previous €11.5 million or 17.6%). From FY25 onwards it has also cut assumptions of margintaking into account the cost reduction plan and operating leverage as Cofle recovers its top line.
This leads to Adj. EBITDA Margin of 15.1% in 2025 (from 17.7%), 15.9% in 2026 (from 17.8%) and 16.3% in 2027. The new margins are well far from the peaks above 20% in 2020-22 and also significantly lower than around 18% in 2019 and 2023. Given the 1H24 results, Banca Profilo now expects a net loss of 3.4 million euros in 2024 and a draw in 2025.
It is pointed out that Cofle is coming exchanged at a discount on an EV/EBITDA25 valuation (3.8x) compared to comparables (6.1x), justified by lower margins and short-term growth.