On Monday, Morgan Stanley raised its recommendation on Getlink to 'overweight' from 'in-line weighting', with a price target raised from 18.3 to 19 euros, believing that a favorable scenario was taking shape around the share.

In a note published this morning, the intermediary points out that the Channel Tunnel operator has benefited from a constant factor in recent years, namely its solid price control.

According to the intermediary, the Group could further strengthen its advantage thanks to the difficulties currently experienced by ferry companies, faced with both rising wages and future payments due to their CO2 emissions.

In the medium term, these factors could boost Getlink's annual Ebitda to between €50 and €60 million, representing an addition of €1.5 to €2 to the share price, according to the analyst.

Morgan Stanley also acknowledges having been too cautious regarding the recovery of the tourism and leisure sector, which has led it to revise its traffic forecasts upwards for 2023-2025, representing a bonus of €1.5 per share.

Lastly, with regard to ElecLink - the high-voltage interconnection cable that runs under the Channel Tunnel - the professional points to payments likely to surprise on the upside in the medium term in view of current electricity market needs, a factor which he believes could add a further 1.1 euros per share.

Copyright (c) 2023 CercleFinance.com. All rights reserved.
The information and analyses published by Cercle Finance are intended solely as a decision-making aid for investors. Cercle Finance cannot be held responsible, directly or indirectly, for the use of information and analyses by readers. Uninformed investors are advised to consult a professional advisor before investing. This information does not constitute an invitation to sell or a solicitation to buy.