Bekaert The journey continues – upgrading target price to € 58
We updated our earnings model after Bekaert delivered better than expected FY23 underlying EBIT margins, up c 80bps to 9.0%, and guided for at least stable underlying EBIT margins in 2024. We upped our uEBIT margin forecast for 2024 by about 50bps and now bank on a 9.2% uEBIT margin while incorporating further margin growth in the following years, as we expect further earnings support from further portfolio pruning and a gradually improving mix whereby more profitable segments such as Specialty Products and BBRG grow above the company average. As such the journey of transformation and underlying improvements is expected to continue. Starting from a very solid balance sheet and in the absence of acquisitions or buybacks, we assume Bekaert to reach a net cash position by the end of next year. Valuation is still very compelling and prompt us to increase our TP from € 47 to € 58, while maintaining our BUY rating.Bekaert is a global technological and market company engaged in advanced solutions based in steel wire transformation and coatings as well as an independent manufacturer of drawn steel wire products. In addition, Co. teams up with customers and suppliers globally to develop, implement, upgrade, and protect both current and future technologies. Co.'s business activities are put in practice along two main axes: Product Innovation and Process Innovation. Product Innovation helps Co. better serve its customers, while Process innovation enables Co. to increase operational effectiveness, minimizing its impact on the environment.
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