FACC: 'Turbulence ahead', Berenberg starts with 'sell'

FACC AG

12/06/2020 08:03

** Berenberg starts FACC  FACC.VI  with "sell" and target
price of EUR 5.90 as it sees "turbulence ahead" for the Austrian
plane parts maker
    ** The broker sees further earnings downside on the back of
lower production volumes and a likely covenant breach in
December
    ** It adds FACC's application for a 60 million euro
emergency state-backed loan eases short-term liquidity concerns,
but notes leverage is seen to rise significantly
    ** In the long-term, Berenberg expects the company to have a
slow recovery due to its high exposure to the weak widebody
sector and delayed Chinese programmes
    ** The broker forecasts a suspension of the dividend until
2022, saying FACC may need to raise equity to return to
manageable levels of indebtedness
    ** It adds FACC's share price has outperformed its peer
group year-to-date, although it has underperformed by 30% over
the past two years

 ((elizaveta.gladun@thomsonreuters.com))