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On Wednesday, Jefferies analyst Priyal Woolf raised the rating for Geberit AG (SIX:GEBN:SW) (OTC:GBERY) from Underperform to Buy, significantly increasing the price target from CHF 374.00 to CHF 710.00. The adjustment follows a positive outlook on the construction sector in Europe, where Geberit, a leading provider of sanitary products, holds considerable market presence.
Woolf’s analysis points to Geberit as a primary beneficiary of the anticipated improvement in the construction industry, driven by the company’s substantial sales exposure in Europe, which accounts for approximately 90% of its business, with around 30% in Germany alone. The firm’s reputation for delivering quality products is also a contributing factor to the upgraded rating, with Geberit known for its sector-leading margin, returns, and free cash flow.
The analyst’s commentary highlights the current consensus on Geberit’s financial performance as reasonable, noting that Jefferies’ estimates are just slightly ahead of the consensus when excluding foreign exchange factors. However, Woolf suggests that a sharper recovery in the construction sector could lead to further volume upside for the company.
This upgrade reflects a potential total shareholder return of approximately 25%, signaling Jefferies’ confidence in Geberit’s capacity to outperform in the near future. The new price target of CHF 710.00 presents a significant increase and paints an optimistic picture for the company’s stock performance.
Investors and market watchers will likely monitor Geberit’s progress closely, as the company stands to gain from the recovering European construction market, which could translate into increased demand for its high-quality sanitary products.
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