On Sunday, Jefferies initiated coverage on Metso (OTC:) OYJ (METSO:FH) (OTC: MXCYY) with a Hold rating and a price target set at €9.40. The firm pointed out that there are positive signs of recovery in the company’s Minerals order intake. However, it also noted that challenges in revenue growth could hinder margin improvement within this division.
The analyst from Jefferies highlighted that the near-term outlook for Metso’s Aggregates division remains tough, especially in its core European and US markets. This outlook is attributed to the current market conditions which are expected to impact the division’s performance.
Additionally, the firm addressed concerns regarding Metso’s working capital and cash conversion processes. These challenges are believed to affect the overall quality of the company’s earnings, implying that there may be underlying issues in financial management that could influence investor confidence.
The price target of €9.40 implies a modest 5% upside from the current levels. This target is reflective of the mixed factors affecting the company, balancing the potential for recovery in some areas with the difficulties in others.
The coverage initiation by Jefferies provides investors with a comprehensive view of Metso’s current financial health and market position, taking into account both the potential for growth and the existing challenges the company faces.
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