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On Monday, Berenberg initiated coverage of Stroeer SE & Co KGaA (SAX:GR), a prominent player in the German out-of-home (OOH) advertising market, with a Buy rating and a price target of EUR71.00. The new price target implies a roughly 40% upside from the stock’s current position.
Stroeer dominates the OOH advertising sector in Germany, boasting a market share exceeding 60%, which is double that of its nearest competitor. The company’s strategy, referred to as OOH+, combines its extensive network for physical advertising with digital efforts, reaching between 40 to 50 million unique visitors monthly on its own and partnered websites.
Despite Stroeer’s strong growth trajectory and solid profitability, the firm’s shares are trading at a 30% discount compared to its peers when evaluated on price-to-earnings (P/E) and enterprise value to earnings before interest, taxes, depreciation, and amortization (EV/EBITDA) ratios. This valuation gap suggests that Stroeer’s stock may be undervalued in the eyes of Berenberg analysts.
Berenberg’s outlook for Stroeer is positive, highlighting the company’s leadership position in the German market and its innovative approach to integrating traditional and online advertising platforms. The analyst’s statement underscores the potential for significant stock price appreciation if the market adjusts to recognize Stroeer’s growth and profitability in line with its industry counterparts.
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