Bond.az - Goldman Sachs downgraded Eiffage SA (FGR:FP) (OTC:EFGSY) to Neutral from Buy and lowered its price target to EUR148.00 from EUR157.00. The stock has declined 13.7% over the past week, though analysis suggests the shares remain undervalued.
The firm reduced its EBIT and earnings per share estimates by 4% and 6% on average for 2026-29 to reflect a more challenging economic backdrop in Europe and France. The revised estimates incorporate lower toll road traffic and construction projections for 2026 and beyond.
Goldman Sachs said the risk-reward profile appears more balanced relative to its broader coverage. The firm's 2026 and 2027 EBIT estimates stand 2% and 5% below Bloomberg consensus.
Weaker road traffic trends, new lows on the French construction PMI, and an elevated corporate tax rate are likely to limit positive momentum. Political risk is unlikely to compress ahead of presidential elections in France in April 2027 and upcoming 2027 budget debates.
Eiffage's valuation has been highly sensitive to French sovereign spreads. The firm maintains a structurally positive medium-term view on the company's electrical engineering business. The company trades at a P/E ratio of 11.92, gross profit margin of 84%, and offers a dividend yield of 3.05% after raising dividends for six consecutive years.
