Azelis Group NV (AZE: BB) saw its stock rating upgraded from Hold to Buy by Jefferies, accompanied by a new price target set at €24.00.
The upgrade is attributed to anticipated improvements in market conditions, which are expected to bolster organic revenue growth and operational leverage starting in the second half of 2024.
The firm's positive outlook is based on the specialty chemicals distributors' recovery prospects in the near future.
Jefferies anticipates that the forthcoming strategy updates from the new CEOs will serve as significant catalysts. It highlighted the asset-light and defensive business models of Azelis as advantageous, particularly in the context of increasing outsourcing trends. Such trends are seen as beneficial for the companies, potentially leading to value-accretive consolidation opportunities within the industry.
The financial institution's stance is that these factors combined will contribute to a favorable environment for Azelis, facilitating a recovery of organic revenue growth. This growth is expected to be supported by the operational leverage that emerges from the improving market conditions projected for the latter half of 2024.
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