Bekaert : Failed strategy and competitive pressure set to hit hard
We downgrade our recommendation on Bekaert to Underperform from Neutral with an updated price target of €34.5 per share. Roughly two years after the December 2023 Capital Markets Day, we conclude that very little has come of the outlined strategy (high growth and high EBIT margins from the Growth Platforms) and that is not likely to change in the remainder of 2025 or 2026, while most of the other targets (step up M&A, ROCE) are also out of sight. We lower our estimates for 2025-2027 materially, as we see headwinds in several businesses, chief amongst which RR, where we expect massive new capacity additions to result in volume loss and price pressure. We are now materially below css, and assume that the strategic 9%-11% EBITu margin is out of sight.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.
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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