Robertet Coverage Initiated by Jefferies International

Analysts from Jefferies International announced on Thursday that they have started coverage on Robertet (EPA:ROBF), a French family-owned company that specializes in natural ingredients for perfumes and fragrances.

Recommendation: Buy the stock, as the company shows strong growth potential in an expanding fragrance market.

Key Highlights

• Global Ranking: Robertet is the 7th largest player in the Flavour & Fragrance (F&F) sector.
• Competitive Advantage: The company has a significant edge due to its differentiated access to natural raw materials.

Business Focus

• One-third of Robertet’s business revolves around natural raw materials, either supplying them to other producers or using them directly in applications like aromatherapy.
• This specialization is a driving force behind Robertet’s industry leadership.

Revenue Target

• Robertet aims for revenue of approximately €1 billion by 2030, corresponding to a compound annual growth rate (CAGR) of 4.8% from 2023 figures.
• Jefferies sees this target as achievable, especially by focusing on faster-growing markets in Asia and Latin America.
• The company may pursue targeted acquisitions to bolster growth.

Market Outlook

• Jefferies views the fragrance market as robust, indicating solid cyclical and structural growth potential for the next two years.
• Robertet is well-positioned due to its strong exposure to fine fragrances, a high-growth segment within the broader market.

Financial Projections

• EBITDA forecasts by Jefferies are 4% higher than consensus estimates for the next three years, showcasing significant free cash flow (FCF) yield compared to peers.
• A price target of €1,040 has been set for Robertet’s stock, indicating a 22% upside potential from the current price.