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On Tuesday, Citi increased the price target for Prysmian SpA (PRY:IM) (OTC: PRYMY) shares to EUR67.50, up from the previous EUR62.50, while reiterating a Buy rating on the stock. The adjustment follows the completion of Prysmian's acquisition of Encore Wire (NASDAQ:WIRE), which was finalized on July 2.
The firm's analyst cited additional analysis and an expert discussion with Mark Criswell, a former District Manager at WESCO, as the basis for the updated outlook. The acquisition is now included in the firm's forecasts for Prysmian. The analyst expressed a positive view on the risk/reward profile of the deal for Prysmian in the medium term, highlighting the potential benefits of cross-selling and the industrial logic behind the transaction.
Despite acknowledging longer-term risks, the analyst noted that any supply response to current elevated profitability levels would likely be delayed due to healthy demand in the medium term. Ahead of Prysmian's second-quarter results, which are scheduled to be released on August 1, the firm anticipates that Prysmian will revise its EBITDA guidance upwards, from the current range of EUR1,575 million to EUR1,675 million to a new expected range of EUR1,880 million to EUR1,950 million.
The report concluded with a positive outlook for the upcoming quarter, as Citi initiated a Positive Catalyst Watch. This suggests an expectation of potential market-moving news or events that could favorably impact Prysmian's stock performance in the near future.
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