Ströer in 'cyclical limbo', HSBC cuts to 'hold'

Stroeer SE & Co KGaA

06/04/2022 08:46

** HSBC downgrades Ströer  SAXG.DE  to "hold" from "buy" and
cuts its price target by 28% to EUR 70, saying the German ad
firm is heavily impacted by the current geopolitical situation
    ** As Russia's invasion of Ukraine weighs on economic
growth, the broker sees heavy impact on Ströer, as "there is no
cost line in any P&L that can be cut as quickly as marketing"
    ** HSBC still highlights Ströer's performance, noting the
company increased Out of Home sales by 67% between 2012-2022 and
adjusted EBITDA up by 275% on the same time frame
    ** "We do not expect any value crystallisation any time soon
and think the stock will find it difficult to withstand cyclical
headwinds (even if they do not lead to a recession)," it adds
    ** Out of 14 analysts that cover the stock, nine rate it
"strong buy" or "buy", ​four "hold" and one "sell"

 (Rporting by Tristan Chabba)
 ((Tristan.chabba@thomsonreuters.com))