Stifel raises its recommendation on SGS from 'sell' to 'hold', with a price target raised from 66 to 73 Swiss francs, stating that it 'views positively the change in management with the appointment of Géraldine Picaud as the Group's new CEO (as of March 26)'.
The broker added: "Performance in the second half of 2023 and the outlook for 2024 imply a level of short-term profitability below consensus expectations, but estimates have been de-risked as management has unveiled cautious targets.
Noting, however, the share's already vigorous reaction to last week's announcements, Stifel prefers to remain cautious at this stage on the dossier, where certain uncertainties limit visibility, and continues to judge the valuation unattractive.
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SGS SA is a Switzerland-based company that provides inspection, verification, testing and certification services. Inspection comprises checking the condition and weight of traded goods at transshipment, quality and quantity control, and compliance with regulatory requirements. Testing services are provided through a global network of testing facilities and test the quality, safety and performance of products against health, safety and regulatory standards. Certification services confirm if products, processes, systems or services are compliant with either national or international standards and regulations or customer defined standards. Verification focuses on ensuring that products and services comply with global standards and local regulations. Additionally, the Company offers training services through SGS Academy.