'Uniquely positioned' - Berenberg starts EuroGroup Lamination with 'buy'

Eurogroup Laminations SpA

13/09/2023 10:55

Sept 13 (Reuters) -    ** Berenberg starts coverage of
Italy's EuroGroup Lamination  EGLA.MI  with "buy" and price
target of 7 euros, saying the group is "uniquely positioned" to
benefit from the electrification in the car industry 
    ** The broker points that Italian producer and distributor
of motor core laminations for electric motors and generators
started a shift towards a more electric vehicle (EV)-focused
product offering and became a sole supplier to many original
equipment manufacturers (OEMs) in the automotive industry
    ** "While we still expect the second half of the year to be
impacted by some weakness in the industrial space, we see the
correction in the shares as mostly overdone," said Berenberg 
    ** Berenberg expects that EuroGroup's EV and automotive
division will outgrow its industrial segment, contributing to an
improvement in medium-term profitability and reaching a 77%
share of revenues in 2027
    ** "While we do not expect a major profitability improvement
in the Industrial division, from 2022-2027 we forecast the
EBITDA margin of the EV & Automotive segment moving over 14%,"
adds the broker
    ** It also expects the company to expand its revenue in 
China, which is the biggest EV market in the world and now
accounts only for 5% of group's revenue, thanks to a strong
backlog of about 1 billion euros ($1.07 billion)
    ** Out of 4 analysts that cover the company, three rate the
stock "strong buy" or "buy"​ and one analyst rates "hold" 

    


($1 = 0.9308 euros)

 (Reporting by Alberto Chiumento)
 ((Alberto.Chiumento@thomsonreuters.com;))