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Vesusius gets a boost as RBC Capital ups its rating to ‘Top Pick’ after recent share price weakness

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The Canadian bank’s analysts said they estimate that Vesuvius’ shares are pricing in around a 20% cut to earnings per share (EPS), however, they see EPS upside supported by self-help


RBC Capital gave a boost to Vesusius PLC (LON:VSV) shares on Monday, upgrading its rating for the metal flow engineering group to ‘Top Pick’ from ‘outperform’ following recent share price weakness.


The Canadian bank reiterated a 700p price target on the FTSE 250-listed group, pointing out that the 20% decline in the stock over three months is the weakest in its coverage.


READ: Vesuvius lifted by rising steel demand


In a note to clients, RBC’s analysts said they estimate that Vesuvius’ shares are pricing in around a 20% cut to earnings per share (EPS), however, they see EPS upside supported by self-help.


The analysts added: “Our 2020E EPS is c5% above consensus and still does not give full credit for the management margin target of 12.5% (vs a pro forma past peak of c16% on our analysis).”


As a result of the upgrade, they said they had Vesuvius to RBC’s European Equity Small & Mid Cap Best Ideas list.


In late morning trade on Monday, Vesuvius shares were nearly 1% higher at 513p.



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