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On Friday, Jefferies raised the price target for FLSmidth & Co A/S (FLS:DC) (OTC:FLIDF) to DKK 420 from DKK 380, while reiterating a Buy rating on the stock. The increase follows FLSmidth’s first-quarter results for 2025, which showcased significant developments in the company’s operations.
FLSmidth’s Q1 performance highlighted two major achievements. The first was an improved margin within its core Mining division, which positions the business favorably compared to its competitors. The second was the announcement that FLSmidth has entered an exclusivity period regarding the sale of its Cement division.
The anticipated sale of the Cement division is expected to provide FLSmidth with additional capital. Analysts project that these funds will be used by the company to engage in mergers and acquisitions, aiming to expand its Mining division and enhance overall profit margins.
The decision to raise the price target is rooted in the positive outlook for FLSmidth’s strategic moves. The company’s focus on building scale in its Mining operations and the potential for higher margin targets contribute to the analyst’s optimistic stance.
Jefferies’ statement on the matter underscored the reasons for the upgraded price target: "FLS’ 1Q25 results delivered on two key fronts. Firstly, an upgrade to margins within the core Mining division, continuing the improving perception of this business relative to peers. Secondly, confirmation they had moved into an exclusivity period for disposal of the Cement division. Bolstered with disposal proceeds, we expect FLSmidth to pursue M&A to further build out further scale in Mining and push the margin target higher. We raise our PT to DKK 420. Buy."
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