UBS Upgrades Viscofan on Strong Growth Outlook

Upgrade Driven by New Financial Targets

UBS has upgraded Viscofan (BME:VIS) shares from a 'Neutral' to a 'Buy' rating, significantly raising its price target to €72 from €58.30. The decision is based on the company's newly announced medium-term targets for 2025-2030, which signal a period of accelerated growth.

Favorable Market and Operational Momentum

Viscofan's new strategic goals include an 8% organic sales growth and a 9% like-for-like EBITDA growth, surpassing historical trends. UBS notes this acceleration is supported by improved operational momentum, a stronger market expanding at 5%, and Viscofan's capacity additions while competitors are not following suit.

Impact on Financials and Shareholder Returns

The bank forecasts Viscofan's organic sales growth will reach 7.1% for the 2025-2030 period, with EBITDA margins expanding to 24.8% by 2030, driven by cost-saving initiatives of €15-22 million. This enhanced performance is expected to boost net profit, EPS, and cash flow, supporting a projected 5% annual dividend growth and continued deleveraging.

Summary Outlook

The upgrade reflects confidence in Viscofan's ability to outperform the market, driven by strategic capacity expansion and effective cost management. Stronger free cash flow generation suggests potential for increased cash returns to shareholders in the absence of major mergers or acquisitions.

**FAQ**

**Q:** Why did UBS upgrade Viscofan stock?
**A:** The upgrade was prompted by Viscofan's new medium-term targets for 2025-2030, which imply faster growth in sales and EBITDA compared to its historical performance.

**Q:** What is the new price target for Viscofan shares?
**A:** UBS raised its price target for Viscofan to €72, up from the previous target of €58.30.

**Q:** What are Viscofan's key growth targets?
**A:** For the 2025-2030 period, the company is targeting 8% organic sales growth and 9% EBITDA growth on a like-for-like basis, along with a progressive dividend policy.

Source: Investing.com