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Investing.com - UBS upgraded PolyPeptide Group AG (SIX:PPGN) from Neutral to Buy on Thursday, while raising its price target to CHF32.00 from CHF19.00.
The upgrade comes despite PolyPeptide’s first-half results falling below expectations on profitability. Management anticipates a significant improvement in the second half as the new reactor in Braine increases production capacity, leading to upgraded full-year 2025 sales guidance.
UBS has increased its fiscal year 2025-2027 estimates, with sales, EBITDA, and EPS forecasts rising by an average of 3%, 6%, and 19% respectively. The firm sees strong medium-term growth potential for PolyPeptide, supported by secured long-term contracts that provide high sales visibility.
The Braine reactor is on track to achieve target utilization rates by the end of 2025, with UBS expecting reduced risks for follow-on capacity expansions. This outlook has prompted UBS to raise its mid-term forecasts to 17% revenue CAGR and 61% EBITDA CAGR.
At 14 times fiscal year 2026 estimated EV/EBITDA, UBS believes PolyPeptide’s discount to the peer average of 16 times more than accounts for its current subdued profitability but undervalues its medium-term opportunity.
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