On Wednesday, Berenberg increased the price target for Bossard Holding AG (BOSN:SW) to CHF269 from the previous CHF260, while maintaining a Buy rating on the stock. The firm highlighted the challenging market conditions but suggested that investors consider positioning themselves ahead of an anticipated upturn in the business cycle.
According to the firm's analysis, the second half of 2024 is expected to continue showing a soft market environment, with year-over-year sales declines possibly diminishing in the third quarter and potentially shifting into positive growth by the fourth quarter. Berenberg advises investors to take positions early in anticipation of this change.
Bossard Holding AG is projected to experience mid-single-digit sales growth in 2025, which could accelerate to low double-digit growth rates in 2026. The firm's recommendation is based on the correlation between Bossard's share price and global Purchasing Managers' Indexes (PMIs), which have shown a strong relationship, with approximately a 70% correlation over the past three years.
The analyst's commentary underlines the importance of global PMIs as forward-looking indicators that could signal the timing for investors to engage with Bossard's stock. The correlation suggests that as PMIs move, so may the company's share price, providing a strategic point of reference for market participants.
Berenberg's revised price target and sustained Buy rating reflect an optimism about Bossard's future performance despite the near-term market headwinds. The firm's analysis points toward a potential recovery and growth phase for the company, aligning with the anticipated positive shifts in the broader market environment.
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