Assystem (ASY:FP) Stock Outlook Adjusted by Stifel: Buy Rating Maintained Despite Lowered Price Target to EUR57.00
Stifel, a leading financial services firm, has revised its outlook on Assystem (ASY:FP) stock, a specialized engineering group focusing on complex infrastructure projects. The price target for Assystem's shares has been reduced to EUR57.00 from EUR60.00. Despite this adjustment, Stifel continues to recommend a Buy rating on the stock.
The revision in the price target is a response to the slower progress in the French Nuclear segment than anticipated. Stifel now expects growth forecasts for 2025 and 2026 to be at +8% and +9%, respectively, down from the initial +9% and +12% projections. This change is attributed to the gradual pace of new build projects, which currently involve around 3% of engineers.
Moreover, the current financial and political climate in France has prompted Stifel to adopt a cautious approach. In the Energy, Technology & Infrastructure (ET&I) division, a significant decline in revenue was noted, with a -28% drop in the first half of 2024 due to several contracts not being renewed. Although there is potential for improvement based on a favorable comparison base, Stifel remains conservative given the uncertainty surrounding these non-core activities.
On a group level, Stifel has slightly adjusted Assystem's margin expectations to just below 7%, reflecting concerns from the company's leadership about the completion of year-end projects, which may spill over into the first quarter of 2025.
Analysis: The adjustment in Assystem's stock outlook by Stifel indicates challenges in the French Nuclear segment and the company's financial and political environment. Investors should consider these factors before making investment decisions, as they can impact the stock's performance in the short to medium term.