On Monday, Deutsche Bank (ETR:DBKGn) adjusted its outlook on Norma Group SE (NOEJ:GR) shares, a company specializing in engineered joining technology solutions. The bank's analyst set a new price target of EUR14.00, down from the previous EUR15.00, while maintaining a Hold rating on the stock.
The adjustment comes ahead of Norma Group's third-quarter results, scheduled for release on November 5, with a conference call to follow on the same day. The analyst noted that after a robust second quarter driven by the water business, a weaker performance is anticipated for the third quarter. This expectation is based on the summer breaks typically observed in the automotive sector and the current challenging macroeconomic environment.
The analyst pointed out that recent profit warnings from suppliers in the industry, such as Hella and Forvia, indicate a continuation of low production volumes into 2024 and 2025. Moreover, original equipment manufacturers (OEMs) have issued ad hoc statements suggesting a lower demand than initially projected, which is expected to affect production levels.
Furthermore, the analyst highlighted that Norma Group's management has signaled a likelihood of achieving the lower end of their financial outlook. Given these factors, Deutsche Bank has revised its financial forecasts for Norma Group for the fiscal years 2024 and 2025, leading to the reduced price target. The bank's analysis suggests that the company's current guidance may be at risk, prompting the adjustment in expectations.
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