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On Wednesday, Morgan Stanley (NYSE:MS) updated its financial outlook for Bureau Veritas SA (BVI:FP) (OTC:BVRDF), raising the price target from EUR35.00 to EUR36.00 while maintaining an Overweight rating on the stock. This adjustment follows the company’s first quarter results of 2025, which were released last week.
The revision of the price target is influenced by a change in foreign exchange (FX) impact projections, with the headwind now expected to be -2.6% compared to the previously forecasted tailwind of +0.9%. This shift is primarily attributed to the recent weakness of the US dollar. Despite this, Morgan Stanley’s forecast for the company’s full-year 2025 organic growth remains unchanged at approximately 7%.
Looking further ahead, the firm has increased its organic growth estimates for the years 2026 to 2028 to about 7-8% per year, up from the earlier estimate of roughly 7%. This uptick is based on additional structural growth tailwinds that align with Bureau Veritas’ own guidance for mid to high single-digit organic growth annually through to 2028.
Morgan Stanley anticipates a modest margin progression for Bureau Veritas, expecting an increase of approximately 20-30 basis points per year over the same timeframe. The analysis also takes into account the company’s recently announced €200 million share buyback program, which is expected to reduce the number of shares outstanding from the fiscal year 2025 onwards.
Despite these changes, the estimated earnings per share (EPS) for the fiscal years 2025 to 2028 remain largely the same. The price target increase is a result of the firm rolling forward its Discounted Cash Flow (DCF) analysis. With the new price target, Morgan Stanley sees a 29% upside for Bureau Veritas shares and has designated the stock as a Top Pick.
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