Next week will be crucial for Piazza Affari’s quarterly reports. Among the many companies that will publish their accounts is Prysmian, which will meet its board of directors on 8 May. Here are the estimates on the results and prospects of the company active in the design, production and installation of cables and cabling systems.
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Expectations on Prysmian’s accounts
Analyst forecasts collected by Bloomberg indicate Prysmian’s first quarter revenues of 3.783 billion euros, down by 5% every year. The expected breakdown sees revenues of 2.76 billion from the Energy division (1.38 billion from Energy & Infrastructure and 1.39 billion from Industrial & Network Component), 537 million from the Projects unit and 339 million from Telecom.
Ebitda is estimated to fall by more than 10% to 381.6 million, while Ebit is expected to decline by 17% to 280.4 million. The quarter should close with a net result down 7% to 168.5 million.
For the entire financial year, revenues of 15.62 billion (+2%) and a slightly growing Ebitda of 1.64 billion are expected. The consensus estimates reported by the company align on average with revenues of 15.5 billion, adjusted Ebitda of 1.635 billion and a net debt of 750 million.
Prysmian’s guidance for the full year 2024
For the current financial year, Prysmian currently expects the following targets: Adjusted Ebitda in the range between 1.575 and 1.675 billion euros; free cash flow in the range of 675 – 775 million euros. Furthermore, it aims to reduce Scope 1&2 greenhouse gas emissions by 36% and Scope 3 by 13% compared to 2019.
These objectives were announced in conjunction with the results of the fourth quarter of 2023. In the last financial year Prysmian achieved an adjusted Ebitda of 1.628 billion (+9.4%), with a margin improving from 9.3% to 10 .6%, a net profit of 529 million (vs. 504 million in 2022) and strong cash generation with a free cash flow of 724 million (+29.5%).
Positive view from analysts for Prysmian
Overall, the recommendations of the brokers covering Prysmian are divided between 11 Buy, 4 Hold e 2 Sellwith an average target price of 52.45 euros, compared to the current valuation of 51.1 euros.
Jefferies recently started coverage on Prysmian with a Hold rating and a target price of 49 euros, predicting a new phase of growth for European cable manufacturers thanks to electrification and digitalization trends, more consolidated markets and a constrained supply context. Elements that should allow an improvement in operating parameters and multiples. On the other hand, according to Jefferies, the company’s shares are already correctly valued by the market, in view of a normalization of prices in the US market and a reduction in inventories in the Telecom segment.
Berenberg increased the target price on Prysmian from 57 to 58 eurosmaintaining the Buy rating, while Bernstein carried out a upgrade on the stock from market perform to outperform, raising the target price from 48 to 60 euros.
The compensation to the former CEO Battista
Meanwhile, Prysmian has announced that the former CEO Valerio Battista (now vice president) will receive a severance pay equal to 24 months of the fixed annual remuneration (€2.2 million). This compensation will be paid in the current month of May.
With regards to the GROW 2023-25 long-term incentive plan, Battista will retain the right to receive a pro rata number of shares possibly awarded at the conclusion of the three-year performance period. A lock-up period of two years will be applied to the assigned shares.
With reference to the Non-Competition Agreement, when Battista ceases to hold any position within the Group, he will be paid an amount equal to 1.32 million for the entire three-year duration (40% of fixed compensation for each year). We remember that the former CEO held the position for 22 years, before being replaced in the role by Massimo Battaini last April 18th.