(CercleFinance.com) – Bank of America reiterated its buy recommendation on Vivendi on Thursday, with a target price of 39 euros, judging that the proposed acquisition of Lagardère was a ‘smart move’ .
“Recent conversations with investors make us think that they are disappointed that Vivendi has opted for an acquisition (Lagardère) to the detriment of share buybacks”, explains the analyst in a note.
‘However, our calculations show that it could be a very nice transaction, which would lead us to view any weakness in prices as a buying opportunity before the split from UMG,’ he adds. .
BofA emphasizes that the investment in Lagardère is made on the basis of ‘low’ valuation multiples, while the operation promises interesting complementarities, particularly in the publishing sector, a market with moderate but steady growth, which could be easily monetized in view of the spectacular development of audiovisual content.
Given the cash generation displayed by Vivendi, the intermediary does not see why the transaction would prevent the media and entertainment group from launching share buybacks.
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