SECO S.p.A.: Hold Rating Maintained Amid Mixed Financial Signals and Gradual Recovery Expectations

Mediobanca analyst Marco Vitale maintained a Hold rating on SECO S.p.A. (7GV – Research Report) yesterday and set a price target of €2.30.

Marco Vitale has given his Hold rating due to a combination of factors that reflect both the current performance and future outlook of SECO S.p.A. The company’s recent financial results showed a better-than-expected profitability and free cash flow generation, despite a decline in sales and EBITDA. This was primarily due to efficiencies in net working capital and a higher gross profit margin than anticipated. However, the overall sales volume was negative, and the net loss was in line with expectations due to higher depreciation and amortization costs.
Looking forward, SECO’s management expects stable to slightly positive revenue growth in the upcoming quarters, supported by a strong product pipeline and strategic partnerships. Despite these positive indicators, the recovery pace is expected to be gradual, leading to a revised estimate of lower EBITDA growth for the upcoming fiscal years. Given these mixed signals, Vitale maintains a Neutral stance, awaiting more consistent financial performance and clearer visibility on the business’s recovery strength before considering a more favorable rating.