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Investing.com - JPMorgan has upgraded Bouygues SA (EN:BOUY) (OTC:BOUYF) from Neutral to Overweight and raised its price target to EUR49.00 from EUR38.00, citing cleared overhangs and emerging sources of upside.
The upgrade follows Bouygues having rebased its guidance and ruled out exercising call options for its Fiber JV, which had previously been concerns for JPMorgan when maintaining its Neutral rating.
JPMorgan identified Equans’ outlook as a key driver for the upgrade, noting the subsidiary’s potential to exceed its original 5% EBIT margin target for 2027, with analysts now projecting a 7% margin mid-term.
This improved Equans outlook could drive 10% annual EPS upgrades and increase JPMorgan’s valuation of the unit from EUR10.0 billion to EUR13.6 billion, with potential upside to more than EUR16 billion.
JPMorgan also noted that reports suggest French market consolidation could materialize by year-end, with potential synergies and market improvements offering additional upside for Bouygues.
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