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Investing.com - Deutsche Bank (ETR:DBKGn) upgraded Azelis Group NV (BR:AZE) from Hold to Buy on Wednesday, raising its price target to EUR17.00 from EUR14.00.
The upgrade comes as Deutsche Bank identifies Azelis as an "under-appreciated potential compounder" that offers consistent share price growth despite being undervalued relative to its operational metrics.
Deutsche Bank attributes the stock’s underperformance to several factors, including its 2021 IPO near peak earnings, lack of track record, an overhang from EQT (ST:EQTAB)’s 36% stake, and suboptimal liquidity. The firm also notes that recent Q1 results were impacted by cost build-up at an inopportune point in the business cycle.
The bank highlights that Azelis’ operational capabilities are comparable to competitor IMCD (AS:IMCD), despite a significant valuation gap, with Azelis trading at 10.9x 2025E EV/EBITDA versus IMCD at 14.5x.
According to Deutsche Bank, industry veterans confirm these operational similarities, reflected in key performance indicators such as average organic EBITA growth between 2018 and 2024 (Azelis 13.6% vs. IMCD 11.7%) and higher conversion margins in 2024 (Azelis 45.7% vs. IMCD 44.1%).
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