'New Bouygues with Equans' offers little valuation appeal - MS cuts

COLAS SA

13/01/2023 08:52

** Shares in conglomerate Bouygues  BOUY.PA  slip 2.8% after
Morgan Stanley cut rating to "underweight" from "equal-weight"
    ** "We model the new Bouygues with Equans," the brokerage
says as it lowers 2023/24 FCF estimates by 65%/25%, sees further
downside risks in 2023 and little relative share price appeal
    ** "While the 6% dividend yield might seem attractive, we
think it's unlikely to be enough to justify waiting before cash
generation hits attractive levels four years out," it flags
    ** Among risks, MS points to Equans integration, unit Colas
 COLP.PA  margins post-warning, Bouygues Telecom's cashflow and
the need for the group to improve its net working capital
trajectory
    ** The stock of Bouygues sits among worst performers on
France's blue-chip index CAC 40  .FCHI  
 (Reporting by Juliette Portala)
 ((juliette.portala@tr.com))