El.En. S.p.A. (0RH2 – Research Report), the Industrials sector company, was revisited by a Wall Street analyst on March 31. Analyst Andrea Randone from Intermonte maintained a Buy rating on the stock and has a €14.50 price target.
Andrea Randone has given his Buy rating due to a combination of factors, primarily centered around El.En. S.p.A.’s strategic disposal of its majority stake in Penta Laser Zhejiang. This transaction is seen as a positive catalyst for the company, as it allows El.En. to strengthen its financial position and focus more on its high-margin, high-growth Medical business. The sale is expected to enhance the company’s net cash position significantly, which will represent about 25% of its market capitalization by the end of the year.
Furthermore, the disposal is anticipated to streamline El.En.’s operations and potentially open up opportunities for future partnerships or sales, particularly with Western companies, given that the Chinese operator did not acquire a minority stake. This strategic move, coupled with attractive valuation multiples and a revised target price of Eu14.5, suggests substantial upside potential for the stock. As a result, Randone has upgraded the rating from Outperform to Buy, reflecting confidence in the company’s strengthened market position and growth prospects.