Palantir a high-risk investment with ’a one-of-a-kind growth and margin model’
On Tuesday, Kepler Cheuvreux revised its stance on Wendel (EPA:MWDP) SA (MF:FP) (OTC:WNDLF), downgrading the stock from Buy to Hold and reducing the price target from EUR107.00 to EUR94.00. The firm’s analyst, David Cerdan, cited a decrease in the valuation of unlisted assets as a key reason for the adjustment. Specifically, the first quarter of 2025 performance of Scalian and Stahl, which are part of Wendel’s portfolio, underperformed with like-for-like (LFL) declines of 11% and 5%, respectively. This underperformance led Kepler Cheuvreux to revise its profit forecasts downward for these companies.
The downgrade also reflects an increased discount rate in the price target, rising from 40% to 45%. Kepler Cheuvreux suggests that Wendel’s holding discount is not expected to narrow due to the current challenging market environment. Additionally, the lack of immediate, material company-specific catalysts was noted as a concern. The analyst pointed out that portfolio companies such as Scalian are currently facing headwinds, and Wendel’s high leverage is viewed as an added risk.
Despite the downgrade, Kepler Cheuvreux acknowledged a positive development for Wendel. The company has established a significant third-party asset management platform, boasting EUR34 billion in assets under management (AuM), which represents 22% of its gross asset value (GAV). This platform is anticipated to potentially compensate for the dividends provided by Bureau Veritas, a principal funding source for Wendel’s dividends, and may aid in the company’s value creation efforts in the medium term.
Kepler Cheuvreux’s revised price target of EUR94.00, down from EUR107.00, is a reflection of both the lowered expectations for Wendel’s unlisted assets and the increased discount rate applied to the company’s valuation. The analysis by Kepler Cheuvreux suggests a cautious outlook for Wendel SA in the near term, while still recognizing the potential for its asset management platform to contribute positively to its valuation in the future.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.