BEKAERT: Wires for tires (and more)
The 3Q trading update and CMD revealed that tougher macro conditions are weighing on top line growth and have prompted Bekaert to step up restructuring efforts. We have lowered our 2019 forecasts but still expect Bekaert to gradually grow towards its underlying EBIT margin target of at least 7%. Valuation looks fairly cheap, both on our DCF model and vs peers. We take a cautious view on the short term given the slowing top line momentum and the bumpy track record. Therefore we reiterate our Hold rating and € 25 target price.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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