On Monday, VAT Group AG (VACN:SW) inventory acquired an up to date ranking from Barclays, transferring from Underweight to Equalweight. Alongside the improve, the worth goal for the corporate was additionally elevated to CHF399 from CHF343.
The adjustment comes after a interval of underperformance by VAT in comparison with the S&P Europe 350 Index (SXNP) and the Philadelphia Semiconductor Index (SOX) year-to-date.
The analyst famous that during the last 9 months, VAT Group’s earnings revisions for 2024 skilled a excessive single-digit proportion lower, whereas the 2025 earnings revisions noticed a low single-digit proportion enhance. Regardless of these blended revisions, VAT Group’s inventory has re-rated roughly 40% throughout this era.
The second-quarter earnings season revealed an earnings miss, third-quarter income steering under consensus, and full-year margins on the decrease finish of the steering vary.
The analysis of VAT Group’s efficiency additionally took into consideration the broader market issues, together with dangers related to China and the return on funding in synthetic intelligence.
The analyst indicated that the current underperformance has been factored into the present valuation, resulting in a extra favorable view of the inventory’s future prospects.
Barclays now anticipates restricted unfavourable earnings revisions for VAT Group going ahead. The brand new worth goal of CHF399 is predicated on a 35 instances price-to-earnings ratio for the 12 months 2025, which is derived from each historic buying and selling ranges and implied multiples from reverse discounted money movement fashions. The analyst concluded that with a extra interesting valuation, there isn’t any longer a motive to take care of an Underweight stance on the inventory.
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