SIG Goup : On road to restore credibility and to move valuation back to higher ground
SIG, number two in the aseptic carton packaging industry behind Tetra Pak, has lost much credibility in recent years due to questionable acquisitions, unfortunate communication and missed expectations. The share price is pretty much at the bottom of its trading range since the IPO in 2018. The new chairman has triggered the dismissal of CEO Samuel Sigrist and a strategy review. We view this shift as a first step on the road to regaining credibility with investors. Also, given its attractive risk/reward profile and despite the challenging environment for consumer-related products currently, we see re-rating potential. We initiate coverage with an Outperform rating and a target price of CHF 17.50 (+38%).SIG Holding AG. SIG Combibloc Group AG is a Switzerland-based company engaged in the containers and packaging industry. The Company manufactures aseptic carton solutions for beverage and liquid food products, ranging from juices and milk to soups and sauces. The Company's product offering consists of aseptic carton packaging filling machines, aseptic carton packaging sleeves, spouts and caps, as well as after-market services. The Company's machinery is automated with software solutions, such as Efficiency Control System (ECS) and Line Monitoring System (LMS). In addition, the Company provides consulting services, ranging from market analysis and product design to the installation, start-up and maintenance of the filling equipment, food safety consulting and continuous improvement of production facilities and processes. The Company is globally active, with operations in the Americas (AM), Europe (EU), Middle East and Africa (MEA), and Asia-Pacific (AP).
Oddo Securities provides securities brokerage and research services. The company offers equity, economic, and derivatives research and credit analysis services. It focuses on insurance, automotive, building materials, pharmaceuticals, telecommunications, information technology, and agri-food industries.
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