Recovery day in Piazza Affari for the title Iveco. After the -9,1% recorded yesterday, the day of the IPO, today at the beginning of the afternoon the shares recover almost 8%, to 10,91 euros, achieving the best rise of the Ftse Mib.
Analysts Equity they started coverage with a judgment”buy” and a target price of 18 euros, explaining that the group has “the resources to relaunch itself, but M&A is essential to accelerate”.
In a report, the experts also explain the performance of the opening session: "Being listed only in Milan, the flowback from forced US sellers or others interested only in CNH is inevitable", which yesterday traded over 8% of the capital.
Equita believes "medium-term goals are achievable”, including Carg revenue growth of 4,5-5% since 2019, to reach 15 billion in 2024 and 17 billion in 2026, with an adjusted net profit of 0,6-0,8 billion in 2026 and a cash net of 1,2-1,4 billion.
The broker points out that there is "no short-term guidance despite the 35-week backlog across the portfolio, probably due to prudence due to component shortages, cost inflation and the new wave of Covid". Among the main drivers are the new S-Way heavy-truck, product innovation, partnerships, expansion of financial services and cost control.
Compared to its competitors, according to Equita, Iveco is currently "much smaller, less geographically diversified, less exposed to heavy trucks that have higher margins and less profitable".
On the one hand this "imposes lower multiples" than other manufacturers, but on the other pushes "Iveco towards M&A deal” and “past and recent rumors, such as Faw and Daimler, go in this direction”.
Finally, analysts also interpret the recent reduction in the stake in the Chinese joint venture with Saic (from 50 to 20%) as a move "to have free hands for new deals in Asia".
