Jefferies ups GEA to 'buy' on mid-term earnings potential
** Jefferies upgrades German food-processing equipment maker GEA Group G1AG.DE to "buy" from "hold", expecting a rebound in orders and higher mid-term earnings potential
** It says food and beverage end-markets, accounting for 70% of GEA's business, have remained depressed for too long and are now in need of equipment upgrades post the energy crisis
** It expects order intake to rebound to EUR 1.4-1.5 billion ($1.5-1.6 billion) a quarter by the year end, boosted by better interest rate environment and dairy prices
** Higher rate of consolidation in dairy farming should create better prospects for dairy market, where GEA's exposure is about 30%, Jefferies adds
** "GEA is heading to its CMD with most of its Mission 2026 targets achieved, and could, thus, potentially announce new 2029 targets," it says about the event scheduled for Oct. 1-2
** It forecasts adj. EBITDA margin of 17-19% by 2029, while consensus implies a flat margin of 15.5% beyond 2025
** Shares in GEA are up 2.5% in early afternoon trading
($1 = 0.9308 euros)
Reporting by Amir Orusov
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