The last time Viscofan had received a buy recommendation from the consensus of analysts collected by FactSet was 2011 , 11 years ago, and the company’s shares could be purchased for just over 25 euros each. But of course, it was a much smaller company, with lower profits, lower margins and diversification.
Precisely because of this, this decade has more than doubled its value on the stock market and the profitability of its business, which, yes, remains the same as always. However, after many years in which analysts had not seen the Navarrese firm as attractive (it used to receive a sell advice), now they have returned the buy recommendation a couple of months after it left the Ibex 35, leaving its place to Rovi , although it was more due to the merit of the latter than the demerit of the former.
Thus, in recent weeks some investment houses such as CaixaBank BPI, Kepler, Mirabaud and Intermoney Valores have improved their advice. The latter precisely explain that they have done so “in light of Viscofan’s recent poor performance since the highs of 2021, which once again offers attractive potential on the floor.”
The average of the analysts that Bloomberg collects places its target price close to 64 euros and even the most pessimistic of all sees a range in its shares (58 euros). The consensus, therefore, expects a revaluation of more than 15% over the next 12 months from current levels.
Among the main risks that hover over the company, the inflationary pressure in its raw materials and how these threaten its margins, a fundamental piece of its strength since it defends the largest in the sector , undoubtedly stands out .
However, until the third quarter of last year it has managed to maintain them, “something that is a complete success since the rest of the companies are not achieving it due to the rise in the price of oil and its derivatives, as well as emission rights of CO2 and energy”, point out from Bankinter.
“This is achieved thanks to the investment in technological efficiency of the last 5 years, the increase in volumes sold, energy coverage made since 2020 and the reduction in the price of collagen,” they add from the bank.
“If they manage to maintain margins above 26.1% also in 2022, we consider that it will have been a success,” they conclude. “The 2020 supply policy has allowed them to cover their backs, both in 2021 and, we believe, also in 2022, despite the circumstances,” argues Beatriz Rodríguez, from GVC Gaesco.
On February 24, Viscofan will definitively present its results for last year, in which analysts expect it to have reached a net profit of 133.5 million euros, which would be the highest in the company’s history . It must be remembered that the company’s guidance is between 127 and 130 million in 2021. Looking ahead to the coming years, the consensus of experts expects it to continue improving its figures each year, until reaching 150 million in 2023.
“Its exposure to emerging markets, especially China, is, and we believe it will be, its greatest growth lever,” they add at Bankinter. China already represents over 5% of its total annual sales, and double-digit growth is expected, while in developed countries, although they are more stable markets, the rate will be between 2 and 3% per year.
It is precisely this expansion of benefits in recent years that is lowering the multiples that must be paid to buy it on the stock market. Looking at this year’s earnings, it is already trading at a PER -times the profit is included in the share price- of 18.7 times, below its average for the last decade, which is 19.9 times .