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Investing.com - Jefferies downgraded Fugro (AS:FUGR) NV ( AMS (VIE:AMS2):FUR) from Buy to Hold on Wednesday, while reducing its price target to EUR12.50 from EUR16.50, citing a significant slowdown in expected growth across the company’s end markets.
The downgrade comes as Fugro’s projected growth in end markets has decreased from approximately 18% in early 2024 to an estimated 8% compound annual growth rate (CAGR) for 2024-2028, according to Jefferies.
The research firm identified a slowdown in offshore wind as the primary factor behind the reduced outlook, with growth expectations in that segment falling from 30% to 14%.
In response to these market conditions, Fugro is implementing cost-saving measures of EUR80 million to EUR100 million, which includes reducing its workforce by 750 people, representing approximately 7% of its total employees.
Jefferies cited "a lower growth outlook and increased execution risk" as key factors in its downgrade decision, noting that its new target valuation aligns with Fugro’s historical valuation levels.
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