In a report released yesterday, Augustin Cendre from Stifel Nicolaus maintained a Hold rating on Hochtief (0EPW – Research Report), with a price target of €123.00.
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Augustin Cendre has given his Hold rating due to a combination of factors that balance Hochtief’s strong performance with some cautionary elements. The company reported impressive FY-24 results, surpassing both consensus and internal expectations, primarily driven by Turner’s robust activity and the positive impact of the Thiess consolidation. This strong performance is underpinned by solid cash collection and a promising order book, indicating continued growth potential. However, the FY-25 guidance suggests only limited upside potential, aligning closely with current estimates and leaving little room for positive surprises.
Despite these solid fundamentals, Cendre expresses concerns over the stock’s valuation, which appears vulnerable in light of high expectations surrounding the data centre trend. Hochtief’s strategic shift into owning and operating data centres, while only representing a modest portion of its order book, is viewed with caution given the speculative nature of the trend. The stock’s current valuation metrics, particularly its price-to-earnings and EV/EBIT ratios, suggest it might be overvalued compared to peers with more consistent histories. Additionally, legacy contract risks remain a concern, necessitating a careful approach going forward.
In another report released yesterday, Barclays also maintained a Hold rating on the stock with a €121.00 price target.
0EPW’s price has also changed slightly for the past six months – from EUR107.500 to EUR150.500, which is a 40.0% increase.