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On Wednesday, Berenberg raised the price target on Recticel SA (REC:BB) to EUR14.50 from EUR13.50, while reaffirming a Buy rating on the stock. The adjustment follows Recticel's robust operational performance during the first half of 2024, which occurred amidst a challenging market environment in the European construction sector.
Recticel reported positive organic sales growth and a double-digit increase in volume within its Insulation business. This performance contributed to a meaningful improvement in margins, resulting in significant year-over-year growth in adjusted EBITDA. The company's strategic initiatives over the past approximately 12 months are credited with driving these positive outcomes.
According to the firm, the results from the first half of 2024 demonstrate the effectiveness of Recticel's strategy and suggest potential for further growth in revenue and margins in the coming years. The analyst anticipates that the expected return to growth in European construction activity in 2025 will serve as a substantial boost for the company.
Furthermore, Recticel's strong net cash position is seen as an asset that could support further growth through acquisitions and other inorganic growth strategies. The firm's commentary underscores the potential for Recticel to leverage its financial health to expand its market presence and enhance shareholder value.
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