, an analyst from Equita Sim, maintained the Buy rating on Sabaf Technology and Safety. The associated price target was lowered to €19.00.
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Equita Sim has given its Buy rating due to a combination of factors including Sabaf’s ability to maintain stable sales and improve margins despite challenging market conditions. The company’s strategic market share gains in regions like Mexico and India, along with successful integration of past acquisitions, have contributed to its performance. Additionally, Sabaf’s valuation appears compressed, suggesting potential for stock re-rating as market conditions improve.
Despite the flat top-line growth, Sabaf’s EBITDA has shown improvement, supported by efficient cost management and enhanced margins from acquisitions. While the demand outlook remains cautious, especially with key clients like Whirlpool and Electrolux indicating sluggish demand, Equita Sim sees potential upside in market demand due to favorable macroeconomic conditions and expected rate cuts in North America. These factors, combined with specific growth projects in Mexico and India, underpin the Buy recommendation.