On Friday, Stifel adjusted its price target for Symrise AG, listed on the Frankfurt Stock Exchange as SY1:GR and over-the-counter as OTC: SYIEY, raising it to €103 from the previous €96. The firm has decided to maintain its Hold rating on the stock. This change in the price target is grounded in various valuation methods, including discounted cash flow (DCF), sum-of-the-parts (SOTP), peer group comparison, and historical valuation metrics.
The firm's analysts predict a robust organic growth for Symrise AG in the first quarter of 2024, anticipating an increase of approximately 14%, primarily fueled by volume growth with additional support from foreign exchange (FX) pricing, estimated at 3-4%. The forecast for the full year (FY) adjusted EBITDA margin stands at 20%, attributed to high volume leverage and internal efficiency measures. The expected absolute EBITDA is projected to grow by roughly 12% year-over-year.
At present, Symrise AG's shares are trading at 17 times EBITDA, which signifies a 33% discount when compared to Givaudan, and a 13% discount relative to the broader ingredients group. This valuation discrepancy is partly ascribed to Symrise's lower EBITDA margin and cash generation capabilities, as noted by Stifel's analysis.
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