On Thursday, Deutsche Bank (ETR:DBKGn) updated its outlook on Voestalpine AG (VOE:AV) (OTC: VLPNY), increasing the price target to €39.00, up from the previous €38.00, while reaffirming a Buy rating on the stock. The adjustment follows Voestalpine's fourth-quarter earnings report, which revealed an EBITDA of €399 million, including €102 million of net negative one-offs.
This resulted in an underlying EBITDA of €501 million, surpassing both Deutsche Bank's estimate of €436 million and the consensus estimate of €411 million. The performance was attributed to stronger results in the Steel, Metal Engineering (ME), and Metal Forming (MF) divisions.
Voestalpine's management has provided an EBITDA guidance range of €1.7 to €1.8 billion, which compares with the market consensus of €1.66 billion and Deutsche Bank's own forecast of €1.78 billion.
This guidance is predicated on the assumption of no recovery and unchanged conditions going forward. Notably, the company's forecast already accounts for an anticipated €60 million negative impact from the unwinding of a gas hedge.
The market's current bearish sentiment is expected to shift, with Deutsche Bank predicting a 5-8% increase in consensus estimates, although its own projections remain largely unchanged. The narrower-than-usual guidance range of €100 million, as opposed to the typical €200 million corridor, excludes the possibility of a recovery in the second half of the year, which could potentially offer additional room for upward revisions.
Voestalpine's fourth-quarter financials have demonstrated a robust performance despite the one-off costs that have affected the reported EBITDA. The company's forward-looking statements suggest a cautious approach to the current market conditions, while also leaving the door open for future positive adjustments should the second half of the year bring about an economic recovery.
InvestingPro Insights
Voestalpine AG's (OTC: VLPNY) recent performance and future outlook have caught the attention of investors and analysts alike. The company's proactive management strategies, as evidenced by an aggressive share buyback program, have been a significant factor in bolstering investor confidence.
Adding to this sentiment, Voestalpine has a notable track record of consistently rewarding shareholders, having raised its dividend for three consecutive years and maintained dividend payments for an impressive 28 years.
From a valuation standpoint, Voestalpine's current P/E ratio stands at 7.29, with an adjusted P/E ratio over the last twelve months as of Q3 2024 at 6.82, reflecting a company that may be undervalued relative to its earnings. The company's strong free cash flow yield is also a testament to its financial health and efficiency.
With a dividend yield of 3.94%, Voestalpine is not only profitable but also offers a significant return to its shareholders. Moreover, the stock's low price volatility suggests it could be a stable addition to an investment portfolio.
For those interested in a deeper analysis, there are additional InvestingPro Tips available that provide further insights into Voestalpine's financial health and market performance. By using the coupon code PRONEWS24, readers can get an additional 10% off a yearly or biyearly Pro and Pro+ subscription to access these valuable tips. With an InvestingPro Fair Value estimate of 6.38 USD, potential investors have an opportunity to gauge the stock's true worth against its current trading price.
It is also worth noting that analysts predict Voestalpine will remain profitable this year, which, coupled with a solid dividend history and a conservative yet optimistic guidance, positions the company as an intriguing prospect for investors seeking stability and consistent returns in their portfolio.
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