Glass sector leaning into recovery, Berenberg; upgrades Verallia

Vetropack Holding SA

07/02/2024 11:14

** Berenberg says the last six months have proved painful
for the glass industry as volumes in food and beverage fell by
more than 10% in Europe in Q3 2023
    ** "While we expect a negative price-cost spread for the
sector in 2024, the declines in EBITDA should be limited to
around 5-8%," says the brokerage
    ** However, Berenberg says the sector will still deliver
record profits and margins in 2023 and the volumes might return
to growth in H2 2024
    ** Upgrades France's Verallia  VRLA.PA  to "buy" from "hold"
on particularly compelling valuation with 7-8x enterprise value
(EV) to EBIT ratio; and volumes likely troughed in Q3 2023,
adding it is possible the management will guide for 2024 EBITDA
above 1 billion euros ($1.08 billion)
    ** Cuts Switzerland's Vetropack  VETN.S  to "hold" from
"buy" as it sees a decline in EBITDA, net profit and prices in
2024 offset by only limited short-term catalysts
    ** Sticks to "buy" for Vidrala  VID.MC  as the Spanish firm
will face a relatively more modest decline in EBITDA of around
5%, helped by modest pricing advantage versus peers, reasonable
exposure to lower spot energy prices and the recent acquisition
of Vidroporto
    ** Sticks to "hold" for Zignago Vetro  ZV.MI  citing higher
pricing pressure, declining demand and profits in 2024, but
still appreciating the Italian company’s unique positioning on
differentiated products
    ** Shares in Verallia are up 2.5%, Vetropack down 3.4%,
Vidrala down 0.5%, Zignago Vetro down 1.5%



($1 = 0.9295 euros)

 (Reporting by Michal Aleksandrowicz)
 ((michal.aleksandrowicz@tr.com))