Underlying growth in glass packaging accelerates, Berenberg says

Vetropack Holding SA

13/06/2023 08:55

** Berenberg says underlying growth in the glass
manufacturing industry is accelerating, and names Spain's
Vidrala  VID.MC  as its top pick in the sector
    ** Consumers and retailers are ready to switch from plastic
to glass, fuelling "seemingly perpetual tightness of supply", it
says, adding it's not "immediately worried" about capacity
additions or the supply/demand balance in the sector
    ** The brokerage however sees "marginally increased" risk in
price increases, new capacity appearing online, and "modestly
weaker" demand conditions, noting the pricing in the industry
has increased by over 40% since end-2021
    ** Berenberg cuts France's Verallia  VRLA.PA  and Italy's
Zignago Vetro  ZV.MI  to "hold" from "buy" -- it sees Verallia's
2024 consensus as "a little stretched", and expects a 12%
decline in Zignago's 2024 EBITDA
    ** It reiterates "buy" for Vidrala and Switzerland's
Vetropack  VETN.S , considering the former worthy of a premium
thanks to its "competitive advantages" in Iberia and Britain,
and seeing the latter as undervalued, with potential in its
"unmatched" coverage of Central and Eastern Europe 

 (Reporting by Laura Lenkiewicz)
 ((Laura.lenkiewicz@thomsonreuters.com))