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Investing.com - Jefferies initiated coverage on Thyssenkrupp AG (ETR:TKA) (OTC:TYEKF), a prominent player in the Metals & Mining industry with a market capitalization of $8.55 billion, with a Hold rating and a price target of EUR11.50.
The initiation comes after Thyssenkrupp shares have rallied approximately 250% year-to-date, with the stock currently trading near its 52-week high of $14.45. According to InvestingPro data, technical indicators suggest the stock is in overbought territory.
Jefferies noted that despite "appealing upside from near term reorganization," including the TKMS spin-off and Steel EU deconsolidation, the current valuation presents a balanced risk/reward profile.
The firm identified several risks for Thyssenkrupp, including its "complex structure, execution, and tough EU macro for autos/steel," while acknowledging that TKMS offers upside potential post-spin-off.
Jefferies also highlighted Thyssenkrupp’s strong balance sheet, which "gives flexibility," stable capital returns at EUR0.15 per share, and positive free cash flow.
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