'No near-term triggers' for SFS: Berenberg ups to 'hold' and shifts focus elsewhere

SFS AG

16/09/2022 08:34

** Berenberg raises Swiss fastening systems maker SFS Group
 SFSN.S  to "hold" from "sell", citing stock price close to its
price target in an "extremely volatile market" and no near-term
catalysts
    ** "With many excellent Swiss industrial companies now at
valuation levels not seen in a decade, we would focus time and
resources on other more actionable investment ideas," it says
    ** The SFS stock had fallen more than 30% YTD to CHF 84.80
as of Thursday's close, only around 10% above the broker's PT of
CHF 75 per share
    ** At its investor day on Thursday, SFS addressed weak
pricing power and high capital intensity of its Engineered
Components division vs other segments, which Berenberg says it
had "long anticipated"
     ** The broker adds the recent Hoffmann acquisition is
likely to lead to further accounting adjustments that will be
hard to evaluate  urn:newsml:reuters.com:*:nZ8N2P602B
    ** Berenberg expects SFS's cash conversion to remain
distorted for at least a year due to supply chain issues and the
impending recession
    ** "Distributor companies typically have a sizeable cash
benefit when demand weakens as they work through inventories,
but this reverses when growth returns," it adds

 (Reporting by Andrey Sychev in Gdansk)
 ((Andrey.sychev2@thomsonreuters.com))