While reiterating its "underperform" rating on Eramet, Oddo BHF has raised its price target from 44 to 47 euros, following an upward revision of its medium-term estimates after last week's presentation of what it described as an "ambitious but relatively unsubstantiated" recovery plan.
The research firm cautions that the improvement projected by the mining and metallurgical group "risks running into local constraints," making Oddo BHF hesitant to fully factor in the targets presented by Eramet.
"In the absence of an asset sale or a capital increase, last week's announcements may be insufficient to address the company's financial situation," the analyst warns, explaining the decision to remain on the sidelines regarding the stock.
"Beyond the risks tied to the financial structure, our caution is also justified by the group's unattractive commodity mix," Oddo BHF adds, highlighting the depressed state of manganese, nickel, and mineral sands markets, largely due to a sluggish Chinese environment.
