EQS Group-News: Research Dynamics
/ Key word(s): Research Update
This report is published by Research Dynamics, an independent research boutique
Higher free float may aid rerating
Valuation and conclusion
We remain encouraged by management's focus on diversifying the offerings towards more remunerative businesses and regions. That said, in the short-term, we expect uncertainties to continue as economic activity is likely to pick up only gradually. However, in the medium to long term, as business activity is expected to pick up steam, we expect the valuation discount to narrow and the stock to witness a revaluation.
We see multiple factors driving the improvement in valuation which include growth prospects in key markets, operating efficiency improvements from new production facilities, expansion of the Packaging and Chemistry divisions' share in revenue and earnings and improvement in the free float of the company's shares. The Paper division, which will be impacted in the short-term due to the weak economic environment in Europe, should benefit from market cost leadership, cost saving initiatives, advanced technology and continued operational improvements in the long-term. The business environment continues to remain challenging due to overcapacities and decreasing demand for newsprint paper. However, over time, tough market conditions may push marginal paper producers out of business which should lead to reduced capacities and aid a recovery in paper prices thereby benefiting efficient and leading market players like CPH. Moreover, we expect that efficiency optimization initiatives across the group - together with the further strategy implementation of increasing presence in growth markets outside of CHF denominated cost structures and paper exposure - should offer support and upside to the company's stock price.
File: CPH_Research Dynamics_25.1.2021
End of Media Release
NEW YORK (dpa-AFX) - An der Wall Street hat der Dow Jones Industrial am Freitag seine jüngsten Verluste ausgeweitet. Die Inflationsängste blieben das bestimmende Thema, auch wenn sich die Lage ...weiterlesen