Citi upgraded testing and inspection company Bureau Veritas to "buy" from "neutral" on Friday, saying synergies from earlier acquisitions make a 2027 adjusted EBIT margin of 17.14% likely attainable, versus a Visible Alpha consensus of 16.65%. The brokerage raised its price target to €31.54 from €31.44, with shares of the Paris-listed company up 2.8% as of 04:15 ET after closing at €26.16 on Oct. 8. Citi put the expected share price return at 20.6% and the total return at 24.5%, including a 3.9% dividend yield, and lifted its 2027 adjusted EBIT forecast to €1.28 billion from €1.24 billion, citing a margin about 30 basis points higher, organic growth rising to 6.3% from 5.5%, and a bigger currency benefit. Since the start of 2024, Bureau Veritas has spent at least €823 million on acquisitions, including Lotusworks, bringing in €413 million of revenue and €49 million of EBITA, and Citi assumes the company reaches its targeted 15% to 20% return on those deals over three to five years, adding €26 million to €64 million a year to EBIT across 2027 and 2028. Citi named upgrades to consensus estimates over the next 12 to 24 months as the catalyst, with a bull case of €35.30 and a bear case of €23.70.
Bureau Veritas SACiti upgraded Bureau Veritas to buy and raised its price target, citing attainable 2027 margin above consensus.
Citigroup Inc.