Berenberg cuts Viscofan to 'hold', expects global headwinds to weigh

Viscofan SA

26/10/2023 09:38

** Berenberg downgrades Viscofan  VIS.MC  to "hold" from
"buy", seeing wider macroeconomic factors to hit the Spanish
meat packaging maker despite its "very strong positioning"
    ** Berenberg expects that lower demand across all regions,
alongside destocking, inflationary pressures and higher energy
costs will weaken the company's short- and mid-term outlook
    ** The brokerage anticipates that factors which are largely
outside the company's control, such as limited ability for
further price increases and prolonged order intake softness in
Asia and the U.S., will weigh on its performance
    ** Berenberg forecasts 2023 EBITDA margin 10% below the
consensus figure, citing higher energy costs, increased
inventory levels and unfavourable currency factors, all in the
context of a weaker sales forecast
    ** On the other side, it notes falling raw material prices
and transport costs and expects margins to improve in 2024-2025
believing that the trough in the order cycle is nearing
    ** The broker cuts Viscofan's target price by more than 21%
to 56.6 euros
    ** Out of 14 analysts that cover Viscofan, nine rate the
stock "strong buy" or "buy,"​ five rate "hold" and no analysts
rate the stock "strong sell" or "sell"

 (Reporting by Marta Serafinko)
 ((Marta.Serafinko@thomsonreuters.com; +48 58 769 66 00;))