Berenberg announced on Friday that it had reinitiated its Buy recommendation on Bureau Veritas shares, with a target price of 29 euros.
In a research note, the analyst points out that growth in the testing, inspection and certification (TIC) market has been slowing steadily over the past ten years.
Before the financial crisis, most businesses were growing faster than GDP, with a trend towards diversification among players who were developing faster than their competitors", recalls the intermediary.
While the sector's stock market valuations reached all-time highs in the wake of the Covid crisis, Berenberg now advocates a "more selective" approach to the sector.
However, he believes that, from a long-term perspective, ICT professionals should benefit from a buoyant structural dynamic, notably linked to the development of ESG themes, even if they risk facing headwinds in terms of growth and margins in the medium term.
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Bureau Veritas SA is No. 1 worldwide in providing compliance evaluation and certification services applied to the quality, safety, health, environment and social responsibility fields. The group's activity consists of inspecting, analyzing, auditing, and certifying products, assets (buildings, industrial infrastructures, equipment, ships, etc.) and management systems (primarily ISO standards) compared to regulatory or volunteering reference standards. Net sales break down by activity as follows:
- industry and infrastructures (80.2%): analysis and control of hygiene, safety and environment, inspection and certification of industrial equipment, verification of construction compliance, certification of management systems,
- consumer goods (12.1%);
- marine (7.7%): inspection and classification of ships.
At the end of 2023, the group owns a network of nearly 1,600 offices and laboratories worldwide.