On Friday, Symrise AG (SY1:GR) (OTC: SYIEY) received an upgrade from CFRA, with the firm shifting its recommendation from Sell to Hold and increasing the 12-month price target to €110.00 ($1 = €0.91), up from the previous target of €90.00.
The adjustment comes after Symrise reported a 7.9% organic sales growth for 2023, which aligns with expectations for high single-digit sales growth.
Symrise's earnings before interest, taxes, depreciation, and amortization (EBITDA) for 2023 stood at €903.5 million, a slight decrease from €921.5 million in 2022. The decline was attributed to a 90 basis point reduction in the margin to 19.1% on a normalized basis.
Despite this dip, the company is projecting ambitious sales targets, aiming for €5.5 billion to €6.0 billion by the end of 2025, and €7.5 billion to €8.0 billion by 2028. Furthermore, Symrise is committed to maintaining its EBITDA margin target between 20% and 23% up to 2025.
The firm's upgrade reflects a valuation based on a price-to-earnings (P/E) ratio of 33 times for the year 2024, which is close to Symrise's five-year average P/E multiple of approximately 35 times. CFRA's revised stance on the stock is influenced by the company's solid performance, which is seen as balanced against the backdrop of uncertainties stemming from ongoing regulatory investigations.
The upgrade also includes CFRA's earnings per share (EPS) estimates for Symrise, which are set at €3.30 for 2024 and €3.80 for 2025. The new Hold rating indicates a neutral perspective on the stock's future performance, suggesting that the firm's strong results have been adequately factored into the current valuation.
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