BofA cuts Bouygues on construction earnings risk in 2023

COLAS SA

05/12/2022 11:22

** Shares in Bouygues  BOUY.PA  slip around 3% after BofA
Global Research cuts the French construction-to-telecoms
conglomerate, citing construction earnings risk from the
macroeconomic environment
    ** The broker also sees the same factors remaining from when
it cut the stock to "neutral" last year and points to "too
complex" equity story, asymmetric downside risks for numbers and
full valuation
    ** BofA says it is 3% below consensus on revenue and 8%
below on EBIT in 2023-24 for Bouygues Construction and the
company's road-building business Colas  COLP.PA , while
consensus assumes 2% top line growth
    ** The brokerage also notes that near-term outlook is
dampened by heavy restructuring efforts in the company's Energy
and Services division, after Bouygues bought Equans last year,
in its biggest deal to date
    ** "Overall, the complexity of the business also warrants a
discount, in our view, and shareholder remuneration growth will
have to pause to digest the recent Equans deal," BofA says
    ** It cuts its price target by 10% to EUR 27
    ** Out of 15 analysts that cover Bouygues, eight rate the
stock 'strong buy' or 'buy', ​six rate it 'hold' and one rates
the stock 'sell'
($1 = 0.9471 euros)
 (Reporting by Lina Golovnya)
 ((lina.golovnya@tr.com))