Citi resumes Exosens with 'neutral', sees potential boost from defence spending

Exosens SA

26/03/2025 09:28

** Citigroup resumes coverage of Exosens EXENS.PA, which supplies night vision systems to NATO, with a "neutral/high risk" rating, seeing potential growth driven by increased defence spending in Europe

** "We believe the new outlook for European defence extends the duration of potential high growth out to 10 years (vs 5 years previously) as Europe trends towards spending 3% of GDP on defence," Citi says

** Exosens is likely to trade towards the cheaper end of European defence peers in EV/EBIT terms but is much more in the pack in terms of FCF yield, the broker says, expecting valuation gaps to narrow in the longer term

** Citi rates the stock "neutral" with a high risk, given insufficient valuation upside and short trading history

** Exosens, which recently joined France's SBF 120 index .SBF120, reported a 35% jump in its annual revenue earlier in March

** The stock has gained nearly 73% YTD

** Five out of six analysts covering Exosens rate it "strong buy" or "buy", with one at "hold"

 (Reporting by Federica Mileo)

 ((Federica.mileo@thomsonreuters.com))