Tesmec, downgrade of Intermonte to Neutral with target price cut

Tesmec downgrade of Intermonte to Neutral with target price cut

(Finance) – Intermonte he lowered to 0.13 euros per share (from 0.22 euros) the target price on Tesmeca company listed on Euronext STAR Milan and active in the field of construction of infrastructures relating to the transport of electricity, data and materials, also reducing the recommendation on the title to “Neutral” from “Buy”.

Analysts write that Tesmec’s third quarter 2023 results were better than expected in terms of profitabilitywith net debt in line with expectations, and showed an improving trend compared to the first half of the year.

Following the publication of the 9M23 results and the revision of the guidance, Intermonte has updated estimates and cut FY23-24 expectations by 5% for sales (271mn in FY23), by 15% for EBITDA (40mn in FY23) and by 60% for EPS, with net debt now seen at 138mn compared to the previous 122mn.

“We change the rating from Buy to Neutral as we prefer to hire a more cautious attitude in light of the expected macroeconomic slowdown – we read in the research – Tesmec is exposed to growth opportunities linked to growing infrastructure investments (the Middle East is a key development area), although the track record in FCF generation is weak”.

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