Street Calls of the Week
Investing.com - JPMorgan has raised its price target on Bouygues SA (EPA:EN) (OTC:BOUYF) to EUR56.00 from EUR49.00 while maintaining an Overweight rating on the stock.
The upgrade follows JPMorgan’s previous month’s rating change to Overweight, with the firm arguing that market concerns about Bouygues’ recent guidance cut and French political risks were overdiscounted, while potential upside from Equans growth and margin improvement remained underappreciated.
JPMorgan’s analysis highlights Bouygues’ M&A opportunities, particularly noting that French telecom industry consolidation possibilities are "misunderstood" and not reflected in the current share price.
The investment bank also believes Bouygues is actively exploring bolt-on acquisition options for its Equans business, following a strategy similar to competitors SPIE and Emcor to scale across growth markets and verticals.
JPMorgan considers Bouygues’ valuation compelling even without M&A activity, noting the stock trades at 10x price-to-earnings ratio with a 14% equity free cash flow yield, while projecting 5% EBITDA growth and 15% earnings per share compound annual growth rate.
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