KBC ups 'too cheap' Bekaert to 'buy' on potential investor returns

NV Bekaert SA

11/10/2022 09:47

** KBC Securities upgrades Belgian steel wire maker Bekaert
 BEKB.BR  to "buy" from "accumulate" saying the stock has a
"very compelling valuation" that is too cheap to ignore
    ** "Bekaert has the balance sheet strength to significantly
benefit from the current share price weakness," the broker says,
which allows for "massive" shareholder returns
    ** KBC estimates that on top of the Bekaert's current 120
mln euro ($116 mln) buyback program, it can spend further 200
mln euros per year on buybacks in the five years from 2023 
    ** Even with buybacks and gradual dividend increases, the
company can still keep the net debt/EBITDA well below 1x over
this period, the broker adds
    ** "The combined shareholder return from such a
(hypothetical) buyback program and a gradually growing dividend
policy would be c. 1.4bn over the next five years," KBC says
    ** Out of six analysts that cover the stock, four rate it
"buy" and two "hold"
    ** The Bekaert shares, down 30% YTD, rise 2.4% in the
morning trade
($1 = 1.0304 euros)
 (Reporting by Elena Vardon)
 ((elena.vardon@tr.com))