Street Calls of the Week
Investing.com - Barclays has upgraded Rational AG (ETR:RAA) from Equalweight to Overweight, while raising its price target to EUR816.00 from EUR805.00.
The upgrade comes as Barclays believes Rational’s current valuation has "de-rated too deeply" despite the company’s "sector-leading quality." The stock is trading at a 10-year low, having returned to pre-2015 levels after a 12-month derating period.
Barclays’ analysis suggests the current share price reflects "an unlikely sales/margin decline scenario" that doesn’t align with the firm’s outlook for the company. The bank’s discussions with US distributors and competitors have led to a more positive view on Rational’s performance in the American market.
The research note indicates Rational is likely gaining further market share in the US, despite near-term risks such as tariffs that could impact demand and margins. Barclays believes these risks are "likely already in the price."
The new price target of EUR816 is based on a multiple of 26x 2026E EV/adjusted EBITA, with an approximately 2-3% uplift in 2026-27E sales forecasts reflecting Barclays’ more optimistic view on market share and potential pricing adjustments due to new tariffs.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.