New to Euronext, Suez Environment flies from 29% for its first day of trading. 35%-owned subsidiary of GDF Suez, the world’s second largest environmental services (water supply, waste treatment) hopes to join the Cac 40 and has a profile more attractive than that of its parent company said Andre Chassagnol, responsible for equity research at HPC (OTCex Group)..

Andre Chassagnol: The bird leaves the nest to meet the terms of the merger between Suez and GDF. The fact remains that the new entity is a heavyweight in its industry, the second largest global environmental services behind his French rival Veolia. If one stays on a purely market approach to the evaluation of Suez Environment, with growth rates of 12% per year and taking into account the defensive nature of its sector, we get a target price of 19.9 euros. But if we take into account the value of its competitors are an average EV / EBITDA of the sector 8, which allows us to calculate an enterprise value of 17.16 billion euros for a capitalization of 11.44 billion and obtain an assessment of market price of 23.4 euros.

AC: If Suez Veolia Environnement is hoisted behind in terms of turnover (12 billion euros against 32 billion for its rival in 2007), its financial position is much healthier than the latter. Net debt / EBITDA of Veolia rises to 3.54 while it is only 2.51 for Suez Environment. Similarly, the EBITDA margin stood at Suez Environment 16.67% in 2007 against 12.93% the same year for Veolia. And if we continue like this, the entire equity ratios that argue in favor of the newcomer on the stock market.

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