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Investing.com -- UBS downgraded Getlink (EPA:GETP) to “neutral” from “buy” rating, citing “losing confidence in the shuttle inflection” and persistent weakness in truck shuttle operations, in a note dated Monday.
Shares of the French company were down 2.9% at 06:17 ET (10:17 GMT).
The brokerage reduced its 12-month price target to €17 a share from €18, saying “truck weakness persists with no clear catalyst in sight.”
The downgrade followed a lack of progress in recovering market share despite labor reforms that were expected to lift Getlink’s competitiveness.
“With more than one year since the introduction of the Anti-Social Dumping legislation, there has been no observable recovery in truck market share and consequently we are not prepared to factor in improvement,” UBS analysts said. They also pointed to “French/UK budget uncertainty” as a drag on overall truck market volumes.
UBS cut its midterm EBITDA forecasts by 7-9%, driven by lower truck volumes, and trimmed its EPS projections by 13-17%.
The brokerage now expects EBITDA of €859 million in FY26 and €887 million in FY27, broadly matching Visible Alpha consensus.
Diluted EPS is forecast at €0.55 for 2025E, €0.60 for 2026E and €0.64 for 2027E, with EBIT margins steady at about 37% and return on invested capital improving from 9.4% in 2025E to 11% in 2028E.
“Getlink has been unable to capitalise on this market share opportunity,” UBS said, referring to cost pressures faced by ferry operators under France’s Anti-Social Dumping and the UK’s Seafarer’s Wage Bill.
Market data in the report showed Eurotunnel’s truck share at roughly 35%, compared with about 40% before Brexit, while ferry operators continued to control around 65%.
UBS noted that despite Getlink’s valuation discount, the lack of growth triggers limits upside. “We fail to see a clear catalyst short term,” it said.
The brokerage values the company at roughly 14x 2026E EV/EBITDA, below its 10-year average of about 17x.
Free cash flow yield is projected at 6% for 2025E and 5.4% for 2026E, compared with a long-term average near 3%.
Dividend yield is estimated at 4% in 2025E, increasing to 4.9% by 2028E, while net debt is forecast to fall to €3.1 billion in 2026E, or about three times EBITDA by the end of the decade.
UBS said possible upside could come from “ferry operator consolidation and mid-term dividend clarity in March,” but cautioned that “further depot access delays, volume weakness/ferries pricing aggression” may continue to pressure returns.
“Whilst Getlink is trading at a discount vs. history, we see no clear catalyst to drive a re-rating,” the brokerage said.