UBS has moved Viscofan shares (BME:VIS) to a Buy rating from Neutral and increased its price target to €72 from €58.30. The broker said the decision reflects Viscofan’s newly announced medium-term targets for 2025-30E, which imply a step-up in growth relative to the company’s historical pace.
The medium-term objectives published by Viscofan include 8% organic sales growth, 9% EBITDA growth on a like-for-like basis, and a progressive dividend policy. UBS interprets these targets as an acceleration versus historical trends and cites improved operational momentum as a key underpinning.
UBS highlighted several drivers behind its more constructive view. The analyst house noted the market appears to be strengthening - with market growth of 5% compared with 3% in 2024 - and argued that Viscofan could widen its outperformance as it adds capacity while some peers are not following suit or are cutting capacity. UBS also pointed to Viscofan’s very small share in the fragmented global packaging market - only 0.1% - as an element of the company’s growth runway.
On the numbers, UBS expects group organic sales growth to accelerate to 7.1% over the 2025-30E period, including FY26 growth of 7.7%. The broker projects EBITDA margins rising to 24.8% by 2030, broadly in line with Viscofan’s stated medium-term margin ambition. Margin improvement is expected to be driven by cost savings initiatives of €15-22 million together with improved cost management.
UBS said the faster delivery of EBITDA, supported by the described cost actions, will feed through into higher net profit, earnings per share and stronger cash flows. As a result, UBS has raised its FY26-28 EPS estimates by 0%, 2% and 8%, respectively, on the back of upgraded topline and margin assumptions.
In cash returns and balance sheet dynamics, UBS expects Viscofan’s dividend to grow at about 5% per annum. The broker also forecasts stronger free cash flow generation leading to continued deleveraging to a net debt/EBITDA ratio of 0.5x by 2030. UBS noted that this path to lower leverage implies potential upside to cash returns to shareholders in the absence of bolt-on M&A.
Summary
UBS upgraded Viscofan to Buy and lifted its price target to €72, citing the company’s medium-term targets that suggest faster organic sales and EBITDA growth, margin expansion from cost savings, and progressive dividends, supported by a favorable market backdrop and capacity additions.
Key Points
- UBS upgraded Viscofan to Buy and raised the price target to €72 from €58.30.
- Viscofan’s medium-term targets: 8% organic sales growth, 9% like-for-like EBITDA growth, and a progressive dividend for 2025-30E.
- UBS forecasts group organic sales growth of 7.1% for 2025-30E, FY26 growth of 7.7%, and EBITDA margins expanding to 24.8% by 2030, backed by €15-22 million of cost savings.
Risks and Uncertainties
- Execution risk on the cost savings programme of €15-22 million, which is central to UBS’s margin and cash-flow improvement view.
- Market growth assumptions - UBS cites a market growing at 5% versus 3% in 2024; slower market expansion would weigh on the sales trajectory.
- Capacity and competitive dynamics - the thesis assumes Viscofan’s capacity additions will deliver outperformance while some peers are not following or are cutting; differing competitor responses could affect outcomes.