Befesa S.A.: Buy Rating Affirmed Amid Growth Prospects and Valuation Discount

Jefferies analyst Fabian Piasta reiterated a Buy rating on Befesa S.A. (BFSA – Research Report) today and set a price target of €35.00.

Fabian Piasta has given his Buy rating due to a combination of factors influencing Befesa S.A.’s financial outlook. The cancellation of the Chinese capital expenditure program has led to a revision of estimates, yet the company is expected to experience a 7% sales growth. This growth is anticipated due to increased electric arc furnace (EAF) volumes in the US and favorable zinc pricing, which should enhance margins despite some operational expenditure challenges.
Additionally, the company’s shares are currently trading at a significant discount of approximately 20% compared to their historical average. This valuation presents an attractive opportunity for investors, as the improved utilization and normalized coke prices are expected to support margin improvements. These factors collectively contribute to the positive outlook and justify the Buy rating.

In another report released on February 28, Hauck & Aufhaeuser also maintained a Buy rating on the stock with a €35.00 price target.