On Friday, Stifel, a financial services firm, adjusted its outlook on Assystem (ASY:FP) stock, an engineering group specializing in complex infrastructure projects. The price target for Assystem's shares was lowered to EUR57.00 from EUR60.00. Despite this change, Stifel continues to recommend a Buy rating on the stock.
The revision of the price target comes as a response to the slower-than-anticipated progress in the French Nuclear segment. Stifel now expects growth forecasts for 2025 and 2026 to be at +8% and +9%, respectively, a decrease from the initial +9% and +12% projections. This adjustment is due to the gradual pace at which new build projects are advancing, currently involving approximately 3% of engineers.
Furthermore, the current financial and political climate in France has led Stifel to take a prudent stance. In the Energy, Technology & Infrastructure (ET&I) division, a noticeable decline in revenue was observed, with a -28% drop in the first half of 2024. This was mainly because several contracts concluded without renewal. Although there is potential for improvement based on a favorable comparison base, Stifel remains conservative, given the uncertain future of these non-core activities.
At the group level, Stifel has made a slight adjustment to Assystem's margin expectations, now just below 7%. This change reflects the company's leadership's concerns about the completion of year-end projects, which may either be finalized in December or spill over into the first quarter of 2025.
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