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Investing.com -- Deutsche Bank (ETR:DBKGn) has initiated coverage on Fincantieri (BIT:FCT) with a "buy" rating and a target price of €17, citing strong earnings growth potential and exposure to rising defense spending. The stock closed at €15.65 on the Milan Stock Exchange.
Analysts expects Fincantieri to deliver compound annual sales growth of 8% and EBITDA growth of 20% over the next three years.
According to Deutsche Bank, the company is strategically positioned to benefit from the ongoing defense upgrade cycle in Europe.
The naval and underwater segments are projected to account for more than 60% of group EBITDA growth through 2027.
The firm also sees internal cost and efficiency measures supporting margin expansion and free cash flow generation. Naval margins are forecast to rise to 8.5% by fiscal year 2027, up from 6.3% in 2024.
Deutsche Bank noted that Fincantieri’s shares trade at a steep discount to peers, which it considers excessive. A potential increase in Italy’s defense budget is highlighted as a possible catalyst for the stock.
The report said that self-help initiatives and the company’s exposure to defense could underpin a re-rating, though it refrains from speculative language and sticks to the outlined financial projections.