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Investing.com - Jefferies downgraded Fugro NV (AMS:FUR) from Hold to Underperform and lowered its price target to EUR10.00 from EUR12.50, citing concerns about the company’s profitability recovery targets.
The downgrade comes as Fugro’s targeted profitability recovery for the second half of 2025 appears "relatively optimistic" when compared with mid-cycle margins, according to Jefferies. The firm noted that Fugro’s top-line growth expectations have more than halved from approximately 18% in early 2024 to roughly 8% CAGR for 2024-2028.
Jefferies highlighted a significant slowdown in offshore wind growth projections from 30% to 14%, leading to increased reliance on cost savings. The firm sees downside risk to fiscal year 2025 consensus estimates of up to 25%.
Fugro expects second-half 2025 revenues will be approximately 20% higher than first-half 2025, implying an 8% decrease year-over-year. The company anticipates this will be supported by postponed orders and increased customer confidence, resulting in fiscal year 2025 revenues of close to EUR2.0 billion, down 13% year-over-year.
As a result of these factors, Fugro has lowered its fiscal year 2025 EBIT margin guidance to a range of 8%-11% from the previous 11%-15% that was issued on August 1. This implies a second-half 2025 EBIT margin of 13%-18%, compared to the record level of 14.4% achieved in the second half of 2024.
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