Analyzing Nexity's 2023 results and outlook, Oddo BHF confirms its 'neutral' rating on the stock, but reduces its target price from €15 to €12.

In 2023, RO came to 246 ME, down 33%, mainly due to a lower contribution from residential property (ROC 140 ME; -50%; MOP 4.8% vs. 8.3%) as a result of higher construction costs, a less favorable customer mix and lower amortization of fixed costs", justifies the broker.

Oddo BHF adds that profitability in the residential property sector is likely to continue to erode in an unfavorable environment.

The analyst therefore considers the current environment to be 'unquestionably very complicated', with a further decline in profitability forecast for 2024.

As a result, Oddo BHF is revising downwards its estimate of ROC by 30%, and believes that while FCF is likely to be loss-making, 'the disposal of the property administration business (and even the distribution business), will provide financial flexibility to adapt to new market conditions'.


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