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Investing.com — Shares in GVS SpA (BIT:GVS) surged by just under a sixth on Wednesday, reaching their biggest intraday climb since last November, after Kepler Cheuvreux upgraded its outlook for the Italian mask and filter maker.
In a note to clients, analysts at Kepler said that they had bumped up their rating of the company to buy from hold, citing an expected recovery in annual organic growth. Kepler projects that GVS’ core earnings margin will rise to more than 22% this year from 20.4% in 2022, although the analysts noted that this is still “well-below” the company’s mid-term potential.
The analysts also pointed to plans from the firm’s management to find new cost synergies from a string of recent acquisitions.
GVS, which is owned by the Scagliarini family and based in the northern Italian city of Bologna, manufactures medical filters and biohazard masks. The business debuted on the Milan Bourse in June 2020 amid a pandemic-inspired bump in demand for personal protective equipment.
However, its key health care and life sciences division has seen performance suffer as the COVID-era boom has waned. Adjusted earnings before interest, taxes, depreciation and amortization dropped by more than a fourth in 2022 to €79 million.
Shares in GVS have slipped by more than 40% over the past one-year basis, and are now below their initial offer price of €8.15.
