Analyst David Farrell from Jefferies maintained a Hold rating on Metso Outotec and increased the price target to €12.60 from €11.00.
Elevate Your Investing Strategy:
- Take advantage of TipRanks Premium at 55% off! Unlock powerful investing tools, advanced data, and expert analyst insights to help you invest with confidence.
David Farrell has given his Hold rating due to a combination of factors surrounding Metso Outotec’s recent financial goals and market performance. The company’s announcement of a new EBITA margin target of over 18% was slightly disappointing, as it only increased by 100 basis points from the previous guidance. This suggests that the Minerals division is still not meeting its goal of exceeding a 20% margin, which may have tempered investor enthusiasm.
Additionally, while the company has set a more ambitious revenue growth target of over 7%, this is only a modest improvement from its historical average of 6% since FY19. The projected 4% uplift in EBITA by FY28F, based on these new targets, appears insufficient to significantly impact the stock’s performance, especially given its recent run-up. Consequently, these factors combined have led to the Hold rating, as the anticipated financial improvements may not be compelling enough to warrant a more bullish outlook.