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Investing.com - Jefferies initiated coverage on Fuchs Petrolub SE (FPE3:GR) (OTC:FUPBY) with a buy rating and a price target of EUR58.00 for the preferred shares on Thursday.
The research firm cited the lubricant manufacturer’s specialty-driven growth model, robust cash generation, and disciplined capital allocation as key factors supporting its positive outlook on the stock.
Jefferies forecasts a 2024-27 sales compound annual growth rate of 5.1% for Fuchs Petrolub, alongside an EBIT margin expansion of 190 basis points to 14.2% during the same period.
The firm projects approximately EUR1 billion in free cash flow over the next three years for the German specialty lubricant company, highlighting a 5-7.5% free cash flow yield and strong balance sheet.
Jefferies also established a separate price target of EUR50 for Fuchs Petrolub’s ordinary shares, noting the company is well positioned to outperform based on its current valuation.
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