Jefferies starts Befesa with 'buy' as decarbonisation prompts growth

Befesa SA

11/10/2023 11:09

**  Jefferies initiates Befesa  BFSA.DE  with "buy", saying
the Luxembourg-based metals recycling company is well-positioned
for growth amid a decarbonisation push in the steel industry
    ** The broker notes Befesa's well-defined five-year capacity
plan that focuses on development of steel dust and salt slags
recycling services
    ** The company plans to invest 410-450 million euros
($435-$477 million) in 2022-2027, of which 110-120 million in
the U.S., 185-205 million in Europe, and 115-125 million in
China
    ** These investments should result in EBITDA growing by
125-155 million euros by 2027, the broker says
    ** Jefferies expects Befesa to post 2023 EBITDA at the lower
end of its outlook, but says Q4 will likely be a "turning point"
with lower energy input costs and higher utilisation rates
    ** Out of 11 analysts that cover Befesa, six rate the stock
"strong buy"/"buy",​ four "hold" and one "sell" - LSEG data
    ** Shares in Befesa are up 1.2% at 1005 GMT

($1 = 0.9428 euros)

 (Reporting by Mateusz Dobrzyniewski)
 ((Mateusz.dobrzyniewski@thomsonreuters.com))