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Investing.com - Kepler Cheuvreux downgraded Exosens SAS (EPA:EXENS) stock rating from Hold to Reduce on Monday, while maintaining a price target of EUR33.00.
The French sensor technology company faces downside risk despite expectations of strong performance in upcoming financial results, according to the research firm. Kepler Cheuvreux cited valuation grounds as the primary reason for the downgrade.
The research firm expects Exosens to reaffirm its yearly guidance for high-teens top-line growth and a margin improvement of over 100 basis points when it reports first-half results on July 30. Kepler noted that the Amplification division is currently capable of delivering approximately EUR80 million in quarterly sales at current capacity.
A key model adjustment driving the downgrade is the use of a higher effective tax rate, which Kepler projects will gradually decrease to a normalized rate of 25% over three years. The firm maintained its price target based on a DCF-backed 11x EBITDA target fair value that includes potential value creation from future acquisitions.
Exosens continues its strategic cash flow redeployment toward expanding tube capacity and pursuing mergers and acquisitions in its Detection & Imaging segment, with the research firm noting no material changes to the company’s mid-term outlook or returns potential.
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