On Friday, Berenberg maintained its Buy rating and CHF18.75 price target for Aluflexpack AG (AFP:SW) stock, despite the company's first-half results falling short of expectations, particularly in earnings per share (EPS).
The financial institution cited ongoing discussions regarding a potential acquisition by Constantia Flexibles, with the anticipated transaction price expected to be disclosed by the fourth quarter of 2023.
Aluflexpack reported its half-year financial performance, which did not meet the projected estimates, with a notable variance in EPS figures. However, there has been no recent update on the potential takeover by Constantia Flexibles. The management of Aluflexpack remains optimistic about the deal, expecting the transaction price to be available later in the year.
The analyst from Berenberg highlighted the current uncertainty surrounding the definition of the packaging market by anti-trust authorities, which could affect both Aluflexpack and Constantia Flexibles. This uncertainty is based on how the market is segmented, for example, by the type of substrates used in packaging. Despite these concerns, the firm reaffirmed its price target for Aluflexpack's shares.
The price target of CHF18.75 set by Berenberg assumes that Aluflexpack will not need to make divestments or incur additional capital expenditures for the acquisition by Constantia Flexibles to proceed successfully. This valuation reflects the firm's outlook on the stock, considering the potential impacts of the anticipated corporate transaction.
Investors and stakeholders in Aluflexpack are keeping a close watch on the developments related to the company's potential acquisition. The outcome of the deal is contingent on various factors, including the stance of anti-trust authorities and the final transaction price, which is expected to be revealed before the end of 2023.
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