Adtran Holdings : Network is starting to work its way back, but how far will it really go?
Adtran Holdings is set to return to growth in 2025 thanks to strong demand for FTTH rollouts and numerous commercial opportunities (BEAD initiative in the US and replacement of Huawei equipment in Europe). That said, we are adopting a cautious stance over the short term as 1/ visibility remains limited over the scale of this recovery while expectations seem somewhat high, 2/ the profitability profile is improving but still lags behind peers and 3/ FCF generation is still difficult to gauge (WCR swings). As we see it, the valuation appears to be somewhat balanced (9x 2025 EV/EBITDA vs 10x for the sector). Coverage initiated with a Neutral rating, TP $ 9 (bear-case scenario: $ 5.8; bull-case scenario $ 11.3).
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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