Erredue S.P.A.: Strong Hydrogen Segment Performance and Strategic Expansion Justify Buy Rating Despite Economic Challenges

Erredue S.P.A. (RDUE – Research Report), the Industrials sector company, was revisited by a Wall Street analyst yesterday. Analyst Davide Rimini from Intesa Sanpaolo maintained a Buy rating on the stock and has a €10.30 price target.

Davide Rimini has given his Buy rating due to a combination of factors that highlight Erredue S.P.A.’s potential for future growth. The company’s FY24 results demonstrated a robust performance in the hydrogen generators segment, which is crucial for the energy transition, despite a slight year-over-year decline in core revenue due to a challenging macroeconomic environment. The operating profit margin remained strong at 38%, and the backlog of EUR 22.5 million provides good visibility for the 2025 outlook.
Rimini also noted the company’s strategic plans to expand its production capabilities for larger hydrogen plants, which are expected to be completed by early 2026. Despite the absence of precise quantitative guidance, the solid backlog and a strong pipeline of hydrogen projects support a positive outlook. Although revenue estimates for 2025-26 have been revised downwards due to economic uncertainties, the expectation of maintaining an EBITDA margin above 30% remains. The valuation, based on discounted cash flow and multiples methodologies, resulted in a target price of EUR 10.3, reinforcing the Buy recommendation.

RDUE’s price has also changed moderately for the past six months – from EUR7.900 to EUR6.950, which is a -12.03% drop .