, an analyst from Equita Sim, maintained the Buy rating on Sabaf Technology and Safety. The associated price target is €20.00.
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Equita Sim has given its Buy rating due to a combination of factors that highlight Sabaf Technology and Safety’s potential for growth and stability. Despite a challenging market environment, Sabaf’s second-quarter results aligned with expectations, showing a decline in sales and profit compared to the previous year’s strong quarter, but a sequential improvement in EBITDA margins. This improvement is attributed to strategic initiatives such as the ramp-up of new plants in Mexico and India, and the expansion of the US company MEC, which have contributed to increased profitability.
Furthermore, the outlook for the fiscal year 2025 suggests slight sales growth and stable margins, with strategic projects providing a solid foundation despite the stagnant market conditions. The Mexican plant’s ramp-up and MEC’s strong performance, along with potential M&A opportunities, indicate promising future prospects. Equita Sim’s valuation of Sabaf at €20 per share, based on both DCF and multiples approaches, reflects the attractive valuation given the company’s strategic initiatives and potential to capture market share even in a stagnant market.