Berenberg reiterates its positive stance on Metlen, maintaining a “Buy” recommendation and target price of €59, indicating significant upside potential exceeding 60%.
Despite the recent profit warning, Berenberg emphasizes the sustained strength of the company’s core business foundation. The performance of the core business remains robust, offsetting pressures that emerged from the MPP, which is considered manageable in the medium term.
The investment bank believes that Metlen is on track to achieve its medium-term EBITDA targets, positioned between €1.9 billion and €2.08 billion by 2029, with no apparent deterioration in the company’s long-term dynamics.
Meanwhile, the stock is characterized as undervalued, with Berenberg highlighting that, provided MPP issues remain under control, there is significant room for appreciation. The reaffirmation of the €59 target price is accompanied by a clear buy recommendation.
Particular reference is made to Metlen’s business model, which is described as “harmonious, vertically integrated, with strong synergies, resilient and competitive.” The combination of activities in metals, energy, renewables and asset rotation creates, according to the analysis, a unique cost advantage at the European level.
High natural gas prices are estimated to work favorably for the company, as they lead to increased wholesale electricity prices, strengthening the profit margins of its highly efficient units.
Simultaneously, the metals sector activity appears protected from market volatility, thanks to hedging strategies, vertical integration and energy self-production, which safeguard aluminum production.
Berenberg also notes Metlen’s resilience against geopolitical challenges, emphasizing that the company is adequately equipped to absorb fluctuations in the energy market, even in an environment of heightened uncertainty such as that associated with developments in the Middle East.
