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Investing.com - Goldman Sachs upgraded SGS SA (SIX:SGSN) (OTC:SGSOY) from Sell to Neutral and raised its price target to CHF85.00 from CHF81.00, citing a more balanced risk/reward outlook.
The investment bank believes its previous bearish thesis has mostly played out, with the new price target implying approximately 0% upside potential. Goldman Sachs sees potential for earnings momentum to improve as SGS accelerates its merger and acquisition program.
Goldman Sachs specifically noted SGS’s recently announced ATS acquisition for US$1.325 billion, which is expected to close in late-2025 or early-2026. The company expects this acquisition to be earnings-per-share accretive from the first year, though it is not yet included in Goldman’s forecasts.
The investment firm believes negative consensus revision trends in recent quarters have weighed on SGS’s share price, and expects this pressure to ease as earnings inflect. This improvement should support SGS’s valuation at its current level and could potentially provide upside depending on execution and earnings momentum.
Since being added to Goldman Sachs’ Sell List on March 20, 2019, SGS stock has declined approximately 18%, compared to the FTSE World Europe’s rise of approximately 50% over the same period.
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