Up 50% since picked by our AI, this chip giant still has significant room to run
On Wednesday, CFRA analyst Jeff Wong revised the stock rating for Bouygues (EPA:BOUY) SA (EN:FP) (OTC: BOUYF), shifting from "Buy" to "Hold," while slightly increasing the price target from EUR36.00 to EUR37.00. Wong’s assessment is based on a 12-month projection that aligns with the company’s five-year average EV/EBITDA ratio of 5.2x. Despite the upgrade in price target, Bouygues’ earnings per share (EPS) estimate for 2025 has been reduced from EUR3.50 to EUR3.12, with a new 2026 EPS forecast set at EUR3.44.
The revision reflects a tempered expectation for Bouygues’ overall organic growth, particularly within its construction businesses. The analyst anticipates that a slower rate of order intake and challenges in the advertising sector will affect the performance of Bouygues’ subsidiary TF1. Furthermore, Bouygues Telecom (BCBA:TECO2m) is expected to face increasing margin pressures due to network migration costs associated with La Poste Telecom customers. However, this impact is anticipated to lessen by 2027.
While Bouygues’ Equans division is delivering significant profitability improvements and showing stronger organic growth prospects, the broader outlook for the Group remains cautious. This cautious stance is influenced by macroeconomic uncertainties and the specific headwinds identified by Wong in his analysis.
Despite downgrading the stock rating to "Hold," CFRA maintains a positive view on Bouygues’ long-term prospects. Wong’s commentary suggests that while near-term challenges are expected to constrain growth, the Group’s overall trajectory remains favorable. Bouygues SA shares will continue to be monitored by investors as they weigh the immediate concerns against the company’s potential for future performance.
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