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Goldman Sachs initiated coverage of Sika AG (SIX:SIKA:SW) (OTC:SKFOF) Wednesday with a buy rating and a price target of CHF280.00, representing approximately 31% upside potential.
The investment bank identified Sika as the largest global construction chemicals player with an 11% market share in the sector, positioning the company as a market leader in its industry.
Goldman Sachs expects Sika’s revenue growth to return to its typical pattern of outperforming peers, driven by new product introductions and an improving construction cycle in Europe, particularly in residential and infrastructure segments.
The firm projects Sika will achieve low-teens earnings per share growth through its forecast period, supported by the company’s established track record of margin expansion and strategic bolt-on acquisitions that have historically been accretive to earnings.
Goldman Sachs views the current valuation as providing an attractive entry point for investors, describing Sika as a "quality compounder" with strong fundamentals and growth prospects in the construction chemicals market.
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