Oddo BHF confirms its 'outperform' rating on Intertek and raises its target price from 5,200 pence to 5,700 pence, following a business review of the British inspection and certification services group, which highlighted its confidence for 2024.
"Management delivered a reassuring speech and remains confident in its ability to achieve a margin of over 17.5% (peak pre-covid) in the medium term", notes the research house, which has revised its own estimates slightly upwards.
Valuation remains below historical multiples (EV/EBIT at 13x vs. 16.6x), and we believe that the strong momentum expected on the topline should support rerating of the share (and the sector) in the quarters ahead", it continues.
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Intertek Group plc is one of the world's leading groups specializing in analysis, control and certification of products and systems. Net sales break down by activity as follows:
- control and certification services for consumer goods (63.4%): textiles, footwear, toys, stationery, household appliances, consumer electronics, information and communication technology products, and products from the automotive, aerospace, lighting, construction, renewable energy and healthcare industries. Also, the group is developing an activity to monitor the certification of international standards;
- development of quality assurance solutions for the industry and infrastructures (25.9%): for the supply chain in the building and construction, renewable energies, oil and gas, petrochemicals, minerals and other industries;
- cargo inspection, analytical evaluation, calibration and technical services to the oil and biofuels industries (21.9%);
- monitoring and assessment of petroleum and agricultural products (19.9%). Besides, Intertek Group plc offers inspection services to government system and regulators to support commercial activities, contributing to the movement of goods across borders.
At the end of 2023, the group operated more than 1,000 inspection offices and laboratories in the world.
Net sales are distributed geographically as follows: the United Kingdom (6.5%), the United States (30.7%), China and Hong Kong (17.8%), Australia (5.3) and other (39.7%).
INTERTEK GROUP PLC 
