Interpump runs with Intermonte's 'Outperform' rating. Target price rises to EUR 43

(Il Sole 24 Ore Radiocor) - The stock of Interpump Group in Piazza Affari shoots to the top of the main list, boosted by the upgrade of the rating by Intermonte analysts, from 'Neutral' to 'Outperform'. The stock of the high-pressure pump company is up around five percentage points, as the FTSE MIB trades slightly lower.

Experts, after cautioning for the past 18 months, upgraded the rating on the stock to 'Outperfotm', also raising the price target from EUR 40 to EUR 43 per share, thus offering a potential upside of around 20 per cent from the last closing price (EUR 35.5). Indeed, analysts believe that expectations for the second quarter 'indicate that the company should be on track to achieve its forecasts for 2025, leading to the confirmation of consensus estimates and ending the negative earnings momentum that has lasted for about six quarters'.

In detail, Intermonte analysts expect second quarter results to be "in line with the statements made by management" during the presentation of first quarter results. Analysts see a possible quarter-on-quarter improvement in the organic performance of the Hydraulics division (organic decline of 8.4% compared to -14.5% in Q1) and a continuation of the strong growth trend in Water Jetting (organic growth of 8.8% compared to 8.2% in Q1). This should have resulted in group sales of EUR 534 million, down 2.8% year-on-year, broken down as follows: -3.1% organic performance, +1.9% external growth effect and -1.5% negative exchange rate effect.

The sequential improvement in turnover, combined with the recovery of the inefficiencies that penalised last year's results, the sim points out, should have led to aslight improvement on a quarterly basis in the group's margin, which remains substantially unchanged year-on-year, with ebitda therefore expected at EUR121m. Below ebitda, higher depreciation and amortisation and financial expenses (mainly related to foreign exchange losses) and a tax rate broadly in line with last year's should bring net profit to around €58m, compared to last year's €62m.

Intermonte, however, warns that 'the current macroeconomic scenario is rather volatile', and therefore the estimates, 'which call for sequential improvement in the second half of the year, contain a degree of uncertainty'. However, the analysts believe that some of the company's end markets (agriculture, construction, lifting) have been hit so hard in recent quarters that 'current levels could at least provide a floor'. Moreover, the analysts note, Interpump is currently trading at a discount to its historical average and the valuation gap to its peer panel has recently widened, offering potential upside should it recover.