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Investing.com - Jefferies downgraded Friedrich Vorwerk Group SE (ETR:VH2) from Hold to Underperform while raising its price target to EUR64.00 from EUR60.00 on Thursday.
The research firm acknowledged the company’s "remarkable recovery run" with profitability returning close to pre-IPO levels as major electricity projects including Corridor A-North have materialized.
Jefferies noted that the stock has been further boosted by additional stimulus announcements from the new German government in recent months.
Despite raising forecasts to reflect faster-than-expected project ramp and improved profitability, Jefferies believes there is "limited upside" at current valuations of 17x EV/EBIT or 24x P/E for fiscal year 2025 estimates.
The new price target of EUR64 values Friedrich Vorwerk at 13x EV/EBIT or 20x P/E, which Jefferies considers fair given expectations that margins should recover to approximately 15% this year alongside near-term growth projections of 10-15%.
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