SIG GROUP: Far too heavily punished... April 29...!

Current share rating: 10 analysts are "BUY", 3 are "Hold" and 0 are "Sell", resulting in an average price target of CHF 21.88. We are still of the opinion that the fair value is above CHF 20. Let's see what the 1Q25 figures the day before yesterday, April 29 (after the editorial deadline), will bring. Sales are expected to be EUR 738m (1Q24: EUR 722m), adjusted EBITDA is expected to be EUR 168m (1Q24: EUR 155m), the margin should be 22.7% (1Q24: 21.5%) and the market expects net profit to be EUR 46m (1Q24: EUR 40m). So what's the problem? Nevertheless, the packaging professional SIG GROUP felt the effects of subdued customer demand in various markets in the first half of 2024. Things were already recovering in 2H24, particularly in the bag-in-box and stand-up pouch business. Beverage packaging also increased towards the end of 2024. We are therefore seeing solid growth in all key figures. The company itself sees an EBITDA margin in the range of 24.5% to 25.5% for 2025. It remains to be seen whether this will be enough to achieve the medium-term targets of 27% and sales growth of between 5% and 6%. In a good market environment, however, this is "easily" possible. The SIG GROUP should not be particularly exposed to the customs dispute. Is the debt ratio still weighing on the share price despite the reduction?

On a side note, the rating upgrade by Moody's is also encouraging: the rating agency now gives the Swiss global market leader for aseptic (germ-free) carton packaging a Baa3 rating (previously: Ba1). This investment grade rating applies to both the long-term issuer ratings in local and foreign currency. Other factors such as the company's significant market position, debt reduction, long-term contracts, etc. are also included in the rating. At the current price level, the share is a clear buy! Even Citi sees it that way with a price target of CHF 22. We are leaving our first target at CHF 19!