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Investing.com - Deutsche Bank (ETR:DBKGn) initiated coverage on Fincantieri SpA (BIT:FCT) with a buy rating on Tuesday, setting a price target of €17.00 as the Italian shipbuilder positions itself to benefit from increased defense spending.
The Milan-listed company is expected to achieve 8% compound annual growth rate in sales and 20% EBITDA growth over the next three years, according to Deutsche Bank’s analysis of the shipbuilder’s prospects.
Fincantieri’s defense-based Naval and Underwater business segments are projected to drive more than 60% of the group’s EBITDA growth through 2027, with Naval margins expected to improve to 8.5% by fiscal year 2027 compared to 6.3% in fiscal 2024.
Deutsche Bank noted that cost and efficiency savings should support margin expansion and strong free cash flow generation at the Italian shipbuilder, which specializes in both military and civilian vessels.
The bank also highlighted that Fincantieri’s current valuation discount compared to peers "seems excessive," and identified a potential increase in Italian defense spending as a catalyst that could boost the company’s shares.
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