Recticel At the table or on the menu?
In light of the tougher macro environment and rising interest rates, we are getting more prudent on a recovery in construction markets in 2024 and have decided to lower our adj EBITDA24 forecast by 6%. The recent CEO change suggests a tighter grip of Baltisse on the strategic direction. Whilst the war chest offers the potential for making sizeable value creating acquisitions and this seems plan A for now, we are not blind to alternative scenarios whereby immediate share upside might come from a take-out scenario for Recticel or a combination with Recticel being the smaller partner. Whatever the future might bring, and despite the weak short term business momentum, we consider that valuation is now compelling enough to upgrade our rating from Hold to Accumulate with TP unchanged at € 12.Recticel is engaged in the production of a variety of polyurethane foams that are used in the furniture, technical, automotive, bedding and insulation industries. The Flexible Foam Business Line covers the manufacture, conversion and marketing of flexible polyurethane foam. The types of flexible foams are classified as Comfort, Technical Foams and Composite Foams. Co. is also engaged in the manufacture of foams used in mattresses and slat bases. In addition, Co. manufactures rigid polyurethane and phenolic foams for thermal insulation. Co.'s automotive activities include: manufacturing moulded seat cushions, window encapsulation and manufacturing interior trim components.
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