On Thursday, Kepler Cheuvreux raised its rating on Ceconomy AG (CEC:GR) (OTC: MTGGY) from Hold to Buy, with an increased price target set at EUR3.40, up from EUR2.80. The firm cited improvements in the company's governance structure and a solid strategy to boost profitability as key factors for the upgrade.
The brokerage firm noted that Ceconomy, which operates consumer electronics stores, now presents a more compelling equity story following its efforts to stabilize its governance and outline a clear plan for enhancing profitability. According to the firm, these initiatives are likely to make the stock more attractive to investors.
Kepler Cheuvreux anticipates that Ceconomy will achieve a 35% compound annual growth rate (CAGR) in earnings per share (EPS) from 2024 to 2026. This optimistic forecast is based on expected market recovery and expansion in the Services sector, despite acknowledging potential risks in the execution of the company's ambitious strategic plan and market normalization in Turkey.
The brokerage's revised price target reflects a positive outlook on Ceconomy's future performance, suggesting that the company is on track to capitalize on market opportunities and drive significant earnings growth over the next few years.
The upgrade represents a shift in the firm's assessment of Ceconomy's prospects, as the consumer electronics retailer works to navigate the challenges and leverage the growth potential in its industry.
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