On Thursday, Deutsche Bank (ETR:DBKGn) expressed a positive stance on Bilfinger SE (GBF:GR) shares, raising its price target to €59.00 from the previous €55.00, while reaffirming its Buy rating on the stock. The adjustment comes in anticipation of Bilfinger's second-quarter earnings report, scheduled for release on August 13.
The bank's analyst anticipates a brighter margin outlook for the Germany-based industrial services company, citing a solid track record that supports an enhanced forecast.
The revised estimates suggest an EBITA margin of 5.5% for the fiscal year 2025, a slight increase from the earlier prediction of 5.4%, and 6.0% for the fiscal year 2026, up from the previous 5.7% forecast.
These adjustments align with the expectation that Bilfinger will reach the lower end of its medium-term margin target corridor of 6-7% within two years, aided by the benefits of integrating its recent acquisition, Stork.
The report further projects robust sales growth for Bilfinger, with an anticipated increase of 13% in fiscal year 2024. This growth is expected to be significantly driven by the consolidation of Stork, contributing approximately nine percentage points, and is forecasted to result in an EBITA margin of 4.9%, which falls within the company's guidance range of 4.8-5.2%.
For the upcoming second quarter, Deutsche Bank forecasts a 16% increase in sales, with 4% attributed to organic growth, and anticipates an EBITA margin of 4.5%. This represents a year-over-year improvement of 60 basis points, albeit at a slower pace compared to the 190 basis point increase reported in the first quarter, due to challenging comparisons and the initially dilutive impact of the Stork integration.
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