On Tuesday, Sany Heavy Equipment (600031:CH) (OTC: SNYYF) received an upgrade in its stock rating by Jefferies, moving from Underperform to Hold. The firm also increased the price target for the company's shares to RMB15.00, up from the previous target of RMB13.50.
The adjustment in rating comes after a review of Sany's financial forecasts. The company's revenue projections for the years 2024 through 2026 were reduced due to sales falling short of market expectations, both domestically and internationally. However, minor adjustments were made to the earnings forecast for the same period, factoring in gains from foreign exchange hedging.
Jefferies set the new price target based on a revised target multiple of 25 times the expected 2024 price-to-earnings ratio, an increase from the 20 times multiple used previously. The analyst cited potential share price catalysts, including a recovery in domestic construction machinery demand and an anticipated re-acceleration of Sany's revenue and earnings starting from the estimated year 2025.
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