Bekaert Trimming down forecasts slightly but valuation remains very compelling
We lowered our underlying EBIT forecasts for FY24-26 by 3-5% after weaker than expected recent macro data and cautious messages out of ao automotive, construction and hydrogen industries. Nevertheless, our forecasts still incorporate gradual margin growth over the period 2024-2026 period, as we expect further earnings support from footprint adjustments, portfolio pruning and a gradually improving mix whereby more profitable segments such as Specialty Products and BBRG grow above the company average. Bekaert is generating sizeable free cash flow, and starting from a very solid balance sheet and in the absence of further acquisitions, we assume Bekaert to reach a net cash position in the course of 2026. Valuation is still very compelling and prompt us to keep our target price at € 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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