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On Tuesday, Berenberg reaffirmed its Buy rating on Veolia Environnement SA (VIE:FP) (OTC: OTC:VEOEY), with a steady price target of EUR35.00. The firm's analyst highlighted that, despite the current political uncertainty in France and anticipated currency challenges in the first half of the year, Veolia's market position and value outweigh these potential obstacles.
The analyst pointed out that Veolia's engagement in attractive markets, consistent business performance, and resilience to macroeconomic fluctuations contribute to the company's strengths. Moreover, Veolia's limited exposure to the political risks within France was noted as a positive aspect, reinforcing the firm's confidence in the stock's valuation.
Veolia, according to Berenberg, continues to be undervalued, which justifies the Buy rating. The company's robust positioning in its sector and its ability to navigate through external pressures without significant impact on its investment appeal were key factors in this assessment.
The endorsement of Veolia as a top-three pick in its industry underscores Berenberg's optimistic outlook for the company. The firm's stance remains unchanged despite the near-term headwinds, suggesting a belief in Veolia's long-term potential and stability.
In other recent news, Veolia Environnement SA reported an impressive Q1 2024 performance, with sales increasing by 3.9%, excluding energy price effects, to reach €11.5 billion. The environmental services leader also experienced significant growth in EBITDA and current EBIT.
Despite a decrease in energy activity by 16.5% due to lower energy prices and mild weather, the company's Water and Waste sectors demonstrated strong performance, with Water Tech growing by 15%. Veolia's strategic program, GreenUp, started positively and aims to achieve €300 million per year in additional value. However, the company anticipates a €100 million FX headwind at the EBITDA level for the full year.
On a different note, Deutsche Bank recently adjusted its price target on Veolia, reducing it to €32.00 from the previous €33.00, while maintaining a Buy rating on the stock. The revision followed a notable decline in Veolia's share price, which dropped approximately 9% since the announcement of French elections.
Despite political uncertainties in France, the bank's analyst emphasized that the French business constitutes only a minority of Veolia's overall group activities, and the company's broader international presence helps mitigate localized risks.
InvestingPro Insights
According to the latest data from InvestingPro, Veolia Environnement SA (OTC: VEOEY) is trading at a P/E ratio of 21.96, which is considered low relative to its near-term earnings growth. This aligns with Berenberg's view that the company is undervalued. Furthermore, Veolia stands out in the Multi-Utilities industry as a prominent player, and it has shown a consistent ability to maintain dividend payments, having done so for 24 consecutive years. An additional highlight is the company's revenue growth over the last twelve months, reported at 5.75%, demonstrating its resilience and potential for growth amidst economic challenges.
InvestingPro Tips also indicate that analysts predict Veolia will continue to be profitable this year, which is substantiated by the company's profitable performance in the past twelve months. For investors seeking more detailed analysis and additional insights, there are more InvestingPro Tips available for Veolia, which can be accessed through the company's dedicated page on Investing.com. By using the coupon code PRONEWS24, users can get up to 10% off a yearly Pro and a yearly or biyearly Pro+ subscription, unlocking further valuable information to guide investment decisions.
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