Jefferies ups Arcadis, sees growth scope in ESG

Arcadis NV

21/08/2023 08:05

** Jefferies initiates coverage of Arcadis  ARDS.AS  with
"buy," expecting  environmental, social and governance (ESG)
policies to support the growth target of the engineering
consulting & design services company
    ** The brokerage expects an EBITA margin improvement to more
than 12% by 2026 to drive high-single digit EBITA growth, likely
 reducing Arcadis' valuation discount
    ** Hence, it applies a target price on the stock of EUR 52,
implying a 26% potential upside
    ** Jefferies notes Arcadis targets mid-single digit organic
revenue growth with relevant sustainable development goals
increasing to >80% of revenues and stimulus packages, such as
the EU Green Deal and IRA, boosting the order backlog 
    ** The brokerage also points to Arcadis' strong balance
sheet and room for further consolidation in a fragmented market
    ** It adds the company's headcount increase was held back by
availability of talented engineers, stresses productivity boost
by digitalisation
    ** Out of 8 analysts that cover Arcadis NV, all rate the
stock "strong buy" or "buy"

 (Reporting by Mariana Abreu)
 ((mariana.abreu@thomsonreuters.com ; +48 58 769 66 50))