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On Tuesday, Barclays (LON:BARC) analyst Celine Soo-Huynh upgraded Aedifica SA (AED:BB) stock rating from Underweight to Overweight and raised its price target from EUR60.00 to EUR74.00. The upgrade was primarily attributed to the company’s renewed focus on growth strategies. Soo-Huynh highlighted that although the outcome of the potential Aedifica/COFB merger remains uncertain, Barclays has increased its acquisition assumption for Aedifica to €75 million annually from 2026 to 2029, a significant jump from the previous assumption of €0.
The analyst pointed out that previously, concerns about limited earnings growth in the healthcare sector and Aedifica specifically had prompted caution. However, with the revised acquisition estimates, Barclays now projects a 0.9% five-year EPS compound annual growth rate (CAGR) for Aedifica. The firm also noted that if the merger with COFB is finalized, it could enhance the combined entity’s liquidity and market relevance, potentially making it more appealing to US investors who have not been significantly exposed to Aedifica.
In the event of a successful merger, Barclays’ scenario analysis suggests that Aedifica’s EPS CAGR for fiscal years 2025 to 2029 could increase from 0.7% based on newly published numbers to over 2%, assuming the deal is completed and the anticipated synergies are realized. Soo-Huynh remarked that while a 2% CAGR might seem modest, it is quite attractive when combined with the current approximate 8% earnings yield, the possibility of further accretive transactions, and a relatively defensive income stream.
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