Aspire Biopharma faces potential Nasdaq delisting after compliance shortfall
Investing.com -- Morgan Stanley cut its rating on Aurubis AG to “underweight” from “equal-weight,” lowering the price target to €95 from €98, reflecting a 13% downside from the stock’s €107.70 closing price on October 16.
The downgrade followed a 50% rally in Aurubis shares since the start of the year, which the brokerage said left the valuation “stretched,” with the stock trading at 8.8x EV/next twelve months’ EBITDA, its highest on record.
Analysts said while the wider copper sector recorded average EBITDA upgrades of 22%, Aurubis’ earnings expectations have remained flat, pointing to “limited upside.”
Morgan Stanley cited a mixed outlook for fiscal 2025-26, where tailwinds from higher gold, silver, and copper prices and record cathode premiums are being offset by hedging losses, weaker scrap refining charges, softer treatment and refining charges (TC/RCs), and foreign exchange headwinds.
The brokerage said Aurubis’ diversified business model reduces its leverage to the commodity upswing, limiting the benefits from rising metal prices.
Recycling growth, which accounts for more than 80% of the company’s €1.7 billion strategic capital expenditure between 2021 and 2027, was described as “a show-me story.”
The brokerage flagged execution risks surrounding the flagship Richmond project in the United States, which is expected to deliver about 65% of the targeted €260 million EBITDA uplift.
Morgan Stanley questioned the company’s implied profitability assumptions, noting that projected earnings per tonne are about 3.5 times higher than Aurubis’ European recycling operations, with full benefits not expected until fiscal 2028–29.
Aurubis’ shares have benefited from stronger commodity prices, optimism around German industrial stimulus, and an improved focus on cash generation.
However, Morgan Stanley said those factors were already reflected in the share price. The analysts added that Aurubis’ forecast return on capital employed will lag peers over the next four years.
The brokerage named Poland’s KGHM as its preferred stock in the sector, citing superior exposure to copper and precious metals and a cheaper valuation of 5.4x 2026e EV/EBITDA, representing a 35% discount to peers.