ING starts DEME at 'buy'; flags its market position, versatility
05/07/2022 09:34
** ING initiates coverage of "dredging and offshore wind
gorilla" DEME DEME.BR with "buy", citing its exposure to
long-term secular growth drivers of the international dredging
market and leading position in global offshore wind market
** It flags DEME's 20% market share in the international
dredging market and its very versatile fleet able to execute any
large, complex dredging, marine infrastructure project in the
world
** The broker sees "considerable upside" in DEME's equity
story, citing its decade-long undervaluation even with its
performance equalling that of its Dutch peer Boskalis BOSN.AS
** The international dredging market is "on the verge of
cyclical recovery" and rising investment levels in the oil and
gas industry after years of underinvestment could offer upside,
ING adds
** DEME's balance sheet is "healthy" and its FCF generation
will become more attractive in 2023-2024 after an expected 2022
EUR 500 million ($517.60 million) capex spending, the broker
says
** The separate listing will create more understanding of
DEME's business and allows investors to meet directly with its
"experienced senior management", ING adds
** DEME was listed through a demerger with its former parent
construction company CFE CFEB.BR urn:newsml:reuters.com:*:nFWN2SM1HX urn:newsml:reuters.com:*:nL8N2SN1SN
** ING sets PT at EUR 123.75, targeting an EV/EBITDA
multiple of 7.2x which reflects cautious 2023 earnings forecasts
($1 = 0.9660 euros)
(Reporting by Olivier Cherfan)
((olivier.cherfan@thomsonreuters.com))