Befesa S.A. (BFSA) AI Stock Analysis

• Market Cap: €1.09B
• Dividend Yield: 2.36%
• Average Volume (3M): 58.85K
• Price to Earnings (P/E): 15.3
• Beta (1Y): 1.13
• Revenue Growth: 2.80%
• EPS Growth: 22.69%
• Country: DE
• Employees: 1,835
• Sector: Industrials
• Sector Strength: 73
• Industry: Waste Management
• EPS (TTM): 0.60
• Shares Outstanding: 39,999,996
• 10 Day Avg. Volume: 33,144
• 30 Day Avg. Volume: 58,846
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): N/A
• P/FCF Ratio: N/A
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: €35.73
• Price Target Upside: 31.65% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 6

• Rating: 73 Outperform
• Price Target: ―

Befesa S.A. has a strong foundation with solid revenue growth and efficient cash generation typical of the waste management industry. The company's stock exhibits positive technical momentum, supported by bullish indicators. Valuation is fair, offering a reasonable dividend yield. The primary challenge lies in improving operational efficiency to enhance profitability metrics, particularly EBIT margins.

Positive Factors

Earnings

Earnings hold up with an adjusted EBITDA of €57m, showing a 4% increase.

Guidance

Management confirmed the guidance and expects a significant volume increase in the second half of the year.

Market Valuation

Befesa trades at a discount to its peers, indicating potential for re-rating as execution risks fade.

Negative Factors

Capital Expenditure

Estimates are cut after the cancellation of the Chinese capital expenditure program.

Market Conditions

Global recession concerns from US news flow add pressure to the stock's outlook.

Sales

Sales are down by 9% due to further maintenance shutdowns and volume declines.

Befesa S.A. Business Overview & Revenue Model

Company Description

Befesa S.A. provides environmental recycling services to the steel and aluminum industries in European, Asian, and North American markets. It operates through two segments, Steel Dust Recycling Services and Aluminium Salt Slags Recycling Services. The Steel Dust Recycling Services segment collects and recycles steel dust and other steel residues generated in the production of crude, stainless, and galvanized steel. The Aluminium Salt Slags Recycling Services segment recycles salt slags; spent pot linings, a hazardous residue generated by primary aluminum producers; and recovers and sells salt, aluminum concentrate, and aluminum oxides. This segment also collects and recycles aluminum scrap and other aluminum residues, such as aluminum dross, shavings, and cuttings; and produces secondary aluminum alloys for automotive and construction industries. The company also offers logistics and waelz oxide treatment services; develops projects and technology; and operates as a marketing company. Befesa S.A. was founded in 1987 and is based in Luxembourg City, Luxembourg.

How the Company Makes Money

Befesa S.A. generates revenue primarily through the recycling and recovery of valuable metals from industrial waste, specifically steel dust and aluminum residues. The company's revenue model is centered on processing these hazardous wastes to extract secondary raw materials like zinc and aluminum alloys, which are then sold to various industries. Befesa also earns income by charging fees for the safe collection and treatment of industrial waste from its clients, which include steel producers and aluminum manufacturers. The company's strategic partnerships with major players in these industries and its investment in advanced recycling technologies are significant factors contributing to its earnings, enabling Befesa to enhance its processing efficiency and expand its market reach.

Befesa S.A. Financial Statement Overview

Summary

Overall, Befesa S.A. demonstrates solid revenue growth and strong cash generation capabilities, typical of a stable waste management company. While profitability metrics show signs of operational challenges in the TTM period, the balance sheet remains robust, providing a sound financial foundation. The company should focus on improving operational efficiency to enhance EBIT margins and ensure sustainable growth.

Income Statement

Befesa S.A. shows a healthy revenue growth trajectory, with revenue increasing consistently from 2020 to 2024. However, the TTM EBIT margin is negative, indicating operational challenges. The gross profit margin has decreased in the TTM period, but the net profit margin remains positive, suggesting some resilience. EBITDA margins are strong, highlighting efficient cash generation from operations.

Balance Sheet

The balance sheet reflects a stable financial position with a moderate debt-to-equity ratio, though it increased slightly in the TTM period. Return on Equity (ROE) is reasonable but has decreased compared to prior years, indicating a decline in profitability relative to equity. The equity ratio remains solid, ensuring a strong asset base.

Cash Flow

Cash flows show stability, with positive free cash flow in the TTM period despite a decrease from the previous year. The operating cash flow to net income ratio is strong, indicating effective cash conversion from profits. However, free cash flow growth is inconsistent, suggesting variability in cash generation.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	1.22B	1.24B	1.18B	1.14B	821.61M	604.33M
Gross Profit	212.81M	514.17M	456.20M	569.11M	465.10M	350.58M
EBITDA	218.99M	195.66M	178.39M	223.15M	188.54M	117.22M
Net Income	45.01M	50.82M	57.97M	106.22M	99.75M	47.61M
Balance Sheet
Total Assets	1.92B	1.98B	1.95B	1.98B	1.80B	1.10B
Cash, Cash Equivalents and Short-Term Investments	96.50M	102.52M	106.69M	161.75M	224.09M	154.56M
Total Debt	697.59M	721.48M	710.77M	710.77M	694.73M	548.22M
Total Liabilities	1.08B	1.13B	1.07B	1.16B	1.16B	772.82M
Stockholders Equity	829.87M	830.22M	823.53M	805.10M	622.84M	317.29M
Cash Flow
Free Cash Flow	40.68M	113.25M	12.51M	30.68M	40.22M	37.72M
Operating Cash Flow	151.69M	191.82M	117.32M	137.33M	117.90M	92.54M
Investing Cash Flow	-62.35M	-78.57M	-90.85M	-151.40M	-449.47M	-53.88M
Financing Cash Flow	-76.28M	-117.27M	-80.24M	-46.89M	401.77M	-9.16M

Befesa S.A. Technical Analysis

• Technical Analysis Sentiment: Neutral
• Last Price: 27.14
• 50DMA: Negative
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For DE:BFSA, the sentiment is Neutral. The current price of 27.14 is below the 20-day moving average (MA) of 27.58, below the 50-day MA of 27.41, and above the 200-day MA of 24.28, indicating a neutral trend. The MACD of -0.05 indicates Positive momentum. The RSI at 48.02 is Neutral, neither overbought nor oversold. The STOCH value of 30.08 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for DE:BFSA.

Befesa S.A. Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
BFSA	73 Outperform	€1.09B	15.32	8.71%	2.36%	2.80%	22.69%
Sector *	64 Neutral	$10.73B	15.74	7.60%	2.01%	2.75%	-15.09%
0E4K	―	€1.33B	55.54	3.09%	―	―	―
0ZPV	―	€935.84M	12.04	7.86%	1.45%	―	―
0BQD	―	€1.54B	13.69	11.18%	―	―	―
0BQE	―	€1.54B	12.77	11.18%	―	―	―
0G77	―	€1.33B	―	-9.21%	―	―	―