Analysts at the research office recommend picking eight stocks among the small and medium-sized companies they track. An overview of their favorite titles for this second half.
In a difficult context for small and medium-sized players, Portzamparc is on the offensive. Since the beginning of the year, the obvious poor performance of this segment of the stock market during the financial market downturn, together with lower liquidity and continuous outflow from funds specialized in this type of companies, did not affect the confidence of analysts in this asset class.
Among the mentioned factors of hope, the subsidiary of BNP Paribas points out IPOs, which are increasingly rare, but in a market that remains open, and above all an environment suitable for takeover bids despite the rise in interest rates.
In this complicated period, Portzamparc highlights his strongest convictions for this second half. A look at eight of our analysts’ favorite mid-caps to play through the end of the year.
Carmat ready to make investors’ hearts beat faster
Portzamparc’s analysts consider the potential of the manufacturer of artificial hearts untouched, knowing in particular that there is only one competitor in the market with colossal needs (150,000 units per year in Europe and the United States). According to the research department, in the next six months there is no risk of dilution given the recapitalization of 40 million euros that took place last April with the support of historical shareholders.
Analysis is it Carmat has good financial visibility until the second quarter of 2023. The positive factor of business recovery in the fourth quarter of this year should also be highlighted.
Eramet shows iron health
BNP Paribas subsidiary analysts also recommend taking advantage of the historical undervaluation of the only one mining group listed on the Paris Stock Exchange. It has the means to take advantage of a favorable market environment, combining good manganese prices and an explosion in sales of electric vehicles that require nickel-based batteries.
Among the catalysts for price growth, Portzamparc identifies the upcoming sale of Erasteel (high-speed steels) subsidiary after Aubert & Duval, as well as a possible nickel project in Indonesia.
Esker, a rare opportunity to seize
The document dematerialization software publisher is also among Portzamparc’s key recommendations, which is finally detecting an entry point in terms of valuation with a price divided by three from the all-time high reached at the beginning of the year.
Analysts at the research office appreciate the still solid fundamentalsEsker, which combines sustainable growth, high profitability, high repeat activity and a solid balance sheet and cash flow. They predict an improvement in the half-year results and distinguish several levers: a strong dollar, partnerships and enrichment of the offer.
Fontaine Pajot is still on the rise
The analysis office also recommends favoring the catamaran manufacturer, whose first-half order book showed double-digit growth, giving it visibility for at least two years. In addition, the sales structure is favorable to the margin, which will also benefit from the leverage of Dufour’s restructuring.
Its analysts estimate a valuation of Fountaine Payot is on the floor, with the risk of a correction considered very limited, and investors expect a worst-case scenario for the level of demand at the opening of trade fairs in September, a hypothesis that is considered unlikely and difficult to verify at this stage.
Ipsos benefits from positive opinion
Portzamparc is particularly positive about the work of the Institute for Studies and Surveys, whose internal growth is accelerating at the end of the health crisis with, in parallel, the planned continuation of an active purchasing policy. Analysts at the BNP Paribas branch believe that the increase in margins is sustainable against the background of increased digitization of data collection and processing.
Finally, value should benefit from the removal of management-related valuation discounts with the impending departure of the deputy chief executive officer and the recent arrival of a new chief financial officer.
Kalray is ready to electrify the markets
Among their favorite values, analysts at the BNP Paribas branch recommend the title of the designer of high-performance processors dedicated to data centers and cars, which now has real access to the data storage market, especially thanks to the recent acquisition of the British company Arcapix.
They expect favorable news during this semester: an increase in sales, realization of the first synergies with Arcapix, and progress on growth drivers for 2023 (5G, machine vision) and 2024 (automotive). Potential of Kalray it is described as colossal in the case of technology adoption, while the economic model characterized by the absence of factories eludes any object of increasing production.
Lisa finds a promising path
The same positive opinion from Portzamparc analysts for the shutter designer, whose performance continues to improve in aeronautics from the low point reached in the first half of 2021, thanks in particular to the increase in the rate of its client Airbus.
In a difficult environment marked by the deterioration of the economic situation, the confirmation of the annual goals of Lisa is welcome, as is the recovery in aeronautical activities, the most profitable and which will also benefit from a sharp lowering of the break-even point. Valuing Lisa qualified as attractive is associated with a limited probability of disappointment.
Lumibird in full light
The laser manufacturer is also one of the choices of large investors for the semester of Portzamparco, which appreciates the low sensitivity to the current context marked by a slowdown in consumption that does not affect its end markets. This is evidenced by the acceleration of order entry in the second quarter Lumibirdwhich in particular has good pricing power and leverage to improve its profitability.
In addition, the group has sufficient firepower to achieve targets of a total turnover of at least 50 million euros. Its valuation is considered reasonable, posting a discount on average over the last three years after falling in price by around 25% from its last peak.