Morgan Stanley analyst Adam Wood upgraded the rating on Indra Sistemas (0HA9 – Research Report) to a Buy yesterday, setting a price target of €47.00.
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Adam Wood has given his Buy rating due to a combination of factors that highlight Indra Sistemas’s strategic transformation and growth potential. The company’s stock has seen a significant increase this year, largely driven by its strategic shift towards the Aerospace & Defence sector. Historically, Indra’s involvement in the defense sector was viewed skeptically due to its ties with the Spanish state. However, with the current expectations of rising European defense budgets, Indra’s exposure to this sector has become a positive driver for its stock performance.
Indra is now benefiting from its increased focus on defense, with a substantial portion of its earnings projected to come from this sector in the coming years. Despite its strong year-to-date performance, the stock is still trading at a discount compared to the broader European defense market, suggesting further potential for growth. The company’s ongoing transformation into a leading defense player in Spain, along with favorable market conditions, supports the expectation of continued upside in its valuation. Adam Wood’s analysis indicates that there is still significant rerating potential, making Indra a compelling investment opportunity.
In another report released on June 20, Kepler Capital also maintained a Buy rating on the stock with a €37.50 price target.
0HA9’s price has also changed dramatically for the past six months – from EUR16.570 to EUR33.460, which is a 101.93% increase.