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Assystem stock faces headwinds from slower project ramp-ups, weaker margins - Stifel

EditorEmilio Ghigini
Published 09/13/2024, 06:08 AM
ASY
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On Friday, Stifel, a financial services firm, adjusted its outlook on Assystem (ASY:FP) stock, an engineering group specializing in complex infrastructure projects. The price target for Assystem's shares was lowered to EUR57.00 from EUR60.00. Despite this change, Stifel continues to recommend a Buy rating on the stock.


The revision of the price target comes as a response to the slower-than-anticipated progress in the French Nuclear segment. Stifel now expects growth forecasts for 2025 and 2026 to be at +8% and +9%, respectively, a decrease from the initial +9% and +12% projections. This adjustment is due to the gradual pace at which new build projects are advancing, currently involving approximately 3% of engineers.


Furthermore, the current financial and political climate in France has led Stifel to take a prudent stance. In the Energy, Technology & Infrastructure (ET&I) division, a noticeable decline in revenue was observed, with a -28% drop in the first half of 2024. This was mainly because several contracts concluded without renewal. Although there is potential for improvement based on a favorable comparison base, Stifel remains conservative, given the uncertain future of these non-core activities.


At the group level, Stifel has made a slight adjustment to Assystem's margin expectations, now just below 7%. This change reflects the company's leadership's concerns about the completion of year-end projects, which may either be finalized in December or spill over into the first quarter of 2025.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.

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