On Wednesday, Deutsche Bank revised its outlook on Verallia SA (VRLA:FP), a glass packaging manufacturer, by reducing the price target to EUR 46.00 from the previous EUR 50.00. The firm has maintained a Buy rating on the stock despite the adjustment.
This change follows an ad hoc press release from Verallia, which indicated a downward revision in its full-year adjusted EBITDA (earnings before interest, taxes, depreciation, and amortization) forecast due to a slower recovery in demand than expected.
Verallia's announcement, made the previous evening, adjusted its expected full-year adjusted EBITDA to align with the 2022 figure of approximately EUR 866 million, a significant decrease from the previously anticipated EUR 1 billion.
This represents a 13% reduction in the forecast. The company's adjustment is attributed to a less robust demand recovery, which contrasts with the earlier demand revival seen in the second quarter of the year.
The revised EBITDA guidance marks a cautious stance from Verallia, reflecting the challenges in the market and the company's performance. The glass packaging giant had previously set more optimistic targets for its financial results, aiming for a higher adjusted EBITDA, which now seems unattainable in the current fiscal year.
Deutsche Bank's price target adjustment takes into account the latest developments from Verallia, aligning expectations with the revised guidance from the company.
While the Buy rating indicates a positive long-term view on the stock, the reduced price target reflects the immediate financial adjustments and market conditions impacting Verallia.
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