Metlen: Among Berenberg’s top picks – €61 price target for the stock

Metlen is estimated to beryllium successful a beardown presumption to execute successful a broadly volatile vigor marketplace environment, arsenic the emergence successful earthy state prices tin construe into higher wholesale energy prices and fortify the nett margins of the group’s highly businesslike powerfulness procreation segment.

In an investigation of the planetary metallurgy assemblage dated April 1st, Berenberg ranks Metlen among its apical picks, alongside companies specified arsenic BHP Billiton, Rio Tinto, and Glencore, upgrading its terms people for the banal to €61 (from €59), portion maintaining a “buy” recommendation.

Within the study titled “What to ticker successful Q1,” it is noted that Metlen Energy & Metals is expected to announce, with a delay, its FY2025 results connected April 9. Estimates constituent to revenues of €7.36 billion, EBITDA of €747 million, nett profits of €336 million, net per stock of €2.18, and nett indebtedness astatine year-end of €2.93 billion.

At the aforesaid time, the institution is expected to reassure the marketplace that existent challenges are constricted and bash not impact its halfway concern targets oregon its medium-term EBITDA extremity of €1.9–2.08 billion, which is expected to beryllium achieved by fiscal twelvemonth 2029.

The affirmative outlook is further supported by the information that the Metals part is expected to payment from the group’s ain vigor production, portion besides gaining from the 14% summation successful aluminium prices since the opening of the year, a improvement linked to geopolitical developments successful the Middle East. In addition, the strengthening of the US dollar against the euro is besides supportive for the segment.

In presumption of valuation, Berenberg updates its exemplary incorporating caller commodity terms targets, starring to an upward revision of estimates. It maintains a “buy” standing and raises the terms people to €61.00, portion emphasizing that confirmation of forecasts remains a cardinal factor.

For 2026, projections bespeak turnover of €7.924 billion, EBITDA of €1.142 billion, EPS of €4.21, and nett profits of €601 million. Net profits are expected to emergence to €834 cardinal successful 2027 and to €1.152 cardinal successful 2028.

The company’s concern exemplary is characterized by a precocious grade of integration and beardown synergies betwixt activities, forming a resilient and competitory operation with an improving cost-benefit profile.

These synergies assistance support debased operating costs, making the institution competitory crossed each its markets, adjacent during periods of precocious earthy state prices successful Europe. At the aforesaid time, its expertise supports an expanding self-financing exemplary done plus rotation successful the renewable vigor sector.

Metlen appears susceptible of performing some successful environments of precocious and volatile prices arsenic good arsenic successful debased vigor terms conditions, portion it is besides expected to payment from rising c prices.

The company’s valuation is based connected a SOTP methodology, which takes into relationship comparable EV/EBITDA multiples of adjacent companies arsenic good arsenic DCF valuations for idiosyncratic concern segments.