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Deutsche Bank increased the price target for Accelleron Industries AG (ACLN:SW) shares to CHF42.00, up from the previous target of CHF34.00. The firm has maintained a Hold rating on the stock. The adjustment reflects a positive outlook on the company's potential for top-line growth, margin expansion, and possible benefits from dividends or share buybacks.
The bank's analysis indicates a slightly improved market environment that could lead to a 7% year-over-year organic revenue growth in the fiscal year 2024, aligning with the top end of the company's guidance. This growth is expected to continue into the fiscal year 2025 with a 5% increase, potentially supported by mergers and acquisitions.
In terms of profitability, Deutsche Bank forecasts an operational EBITA (earnings before interest, taxes, and amortization) of 25.3% for the fiscal year 2024, which is consistent with the company's guidance. A modest expansion in operational EBITA is also anticipated for the fiscal year 2025.
However, the firm notes that Accelleron's spending on mergers and acquisitions, coupled with the absence of a clear dividend policy, may limit the potential for share buybacks in the fiscal year 2024.
Despite the raised price target, Deutsche Bank expresses caution due to the valuation, suggesting minimal upside from the current share price levels, which substantiates their decision to maintain a Hold rating on Accelleron shares.
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