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Tuesday, Citi analysts increased their price target on Verbund (VIE:VERB) AG (VER:AV) (OTC: OEZVY) shares to EUR64.00 from EUR62.00, while sustaining a Sell rating on the stock. The adjustment reflects expectations of a short to medium-term boost in the company’s financial results due to the recent spike in gas and power prices.
Citi’s analysis anticipates that the upcoming full year results, set to be announced on March 20th, will be a significant event for Verbund AG. Analysts are looking for the company to provide its 2025 guidance, with an estimated EBITDA target of EUR3 billion. Additionally, the level of hedges and the Dividend Per Share (DPS) proposal, which is expected to be EUR2.75/share, will be closely watched by investors.
The firm’s stance on Verbund AG’s stock is grounded in the belief that current power market conditions will normalize, and the valuation of the company’s normalized cash flow is considered somewhat expensive. This outlook remains unchanged despite the price target adjustment.
Investors and market watchers are now directed towards the full year results announcement for further insights into Verbund AG’s financial standing and strategic direction. The details provided on the level of hedges and the proposed DPS will be key factors in assessing the company’s performance and shareholder returns.
In summary, while Citi acknowledges the potential short-term financial uplift for Verbund AG due to market conditions, their long-term perspective on the stock remains cautious, as indicated by the Sell rating.
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