Eurobank Equities sets Metlen target price at 56.20 euros citing resilient profitability

Eurobank Equities has maintained its market recommendation for Metlen Energy & Metals with a target price of 56.20 euros, despite the company’s recent profit warning and revised EBITDA forecast. The brokerage firm announced its position on Friday following Metlen’s downward revision of its 2025 EBITDA guidance to 750 million euros, representing a significant adjustment to the metals and industrial group’s financial outlook.

According to the metals and industrial group, the new EBITDA forecast for 2025 stands 25 percent lower than previously projected. The revision comes as Metlen navigates operational challenges that have impacted its near-term financial performance expectations.

Factors Behind Metlen EBITDA Revision

Eurobank Equities identified several key factors contributing to the revised forecast for Metlen. The brokerage firm notes that the decline is linked to cost overruns and delays in M Power Projects (MPP) operations, which have created headwinds for the company’s profitability targets.

Additionally, a shift in the closing timeline of three asset rotation transactions has affected when specific cash inflows will materialize. These asset rotation deals represent a strategic component of Metlen’s business model, and their delayed completion has implications for the company’s financial calendar and liquidity position.

Market Confidence and Stock Valuation Outlook

Despite the profit warning, the brokerage firm sees the upside margin for Metlen shares preserved under current market conditions. However, Eurobank Equities makes it clear that the timeframe for the stock to return to higher valuations will depend significantly on investor sentiment and operational execution.

The analysts emphasize that quarterly results showing no new negative developments will be critical for maintaining market confidence. The speed at which the company can restore investor trust will ultimately determine how quickly the stock recovers its previous valuation levels.

Asset Rotation Strategy Under Scrutiny

The delayed asset rotation transactions have emerged as a central concern in Metlen’s revised financial outlook. These strategic asset sales were originally factored into the company’s cash flow projections and overall financial planning for the current year.

Meanwhile, the industrial group continues to position asset rotation as a key pillar of its corporate strategy. The timing of these transactions, however, now carries additional weight as investors assess the company’s ability to execute on its strategic objectives while managing operational challenges.

Analyst Perspective on Investment Potential

Eurobank Equities’ decision to maintain its market recommendation suggests the firm views current challenges as temporary rather than structural. The 56.20 euro target price indicates the analysts still see meaningful upside potential from current trading levels.

In contrast to more cautious perspectives, the brokerage’s stance reflects confidence in Metlen’s underlying business fundamentals and long-term strategic direction. The emphasis on monitoring quarterly results indicates that near-term performance will serve as an important barometer for validating this outlook.

Implications for Metlen Energy & Metals Investors

The revised EBITDA guidance represents a material change in Metlen’s financial trajectory for 2025. Investors will need to recalibrate their expectations around profitability and cash generation in light of the 25 percent reduction from previous forecasts.

However, the maintained buy recommendation from Eurobank Equities provides some counterbalance to negative sentiment. The analysis suggests that patient investors may still be rewarded as operational issues are resolved and asset rotation transactions complete.

Market participants will closely monitor Metlen’s upcoming quarterly earnings releases for signs of stabilization or further deterioration. The company has not confirmed specific timelines for completing the delayed asset rotation transactions, leaving some uncertainty around when the positive cash flow impacts will materialize.