Oddo BHF confirms its 'underperform' rating on Latécoère, with a price target reduced from 0.65 to 0.01 euro.

The analyst reports that Latécoère has postponed its annual general meeting scheduled for June 28 due to slow negotiations with OEMs on prices.

"The company was unable to finalize its 2023 annual accounts and suffered a negative impact on its results due to the inability to pass on inflation, supply chain disruptions and cost overruns," the broker says in essence.

Against this backdrop, Oddo BHF expects adjusted EBITDA to be -16.3 ME in 2024, on sales of 711.9 ME (+15.8%)

'We do not foresee a return to positive EBITDA before 2025, at +4.6 ME. However, on the basis of our forecasts, Latécoère would still be a long way from its covenants linked to the EMP (5x at the end of 2025), which presages further tense discussions", adds the analyst.

At this stage, Oddo BHF does not see any tangible acceleration in the cash generation trajectory before 2027, nor any M&A solution that could be favorable to the minority shareholder.

These factors therefore prompt the research department to 'stay away from the stock'.

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