Morgan Stanley (NYSE:MS) has upgraded shares of Azelis Group NV (AZE: BB), a global distributor of specialty chemicals and food ingredients, from Equalweight to Overweight.
The firm set a new price target of EUR 22.30 for the company's stock.
The upgrade reflects the analyst's positive view of Azelis' business model and performance. Azelis has been acknowledged for its strong execution track record since its initial public offering (IPO), delivering robust margins through an asset-light model.
The company has also demonstrated solid earnings growth and cash generation capabilities.
Azelis is expected to continue benefiting from trends in industry-wide outsourcing and supplier rationalization. The firm also cited Azelis' potential for consolidation opportunities, market share gains, and a marginally more defensive end-market mix in comparison to its closest peer, IMCD.
After experiencing a volatile period in 2023 and 2024 due to destocking, pricing unwind, and volume weakness, the outlook for Azelis appears more positive.
The analyst projects organic growth to turn positive in the second half of 2024, with an improving outlook extending into 2025.
Despite ongoing volatility in certain end-markets, the demand for innovative solutions is on the rise.
The analyst noted that destocking has largely concluded, and weaker segments like Agriculture, which were previously impacted by adverse weather conditions in Europe, are showing signs of recovery.
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