JPMorgan has initiated coverage of Greek industrial group METLEN with an Overweight rating and a target price of €64 per share.
The target price represents a potential upside of approximately 30 percent compared to the stock price of €48.40 recorded at the time of the publication of the report.
In a blue sky scenario, JPMorgan estimated that the valuation of the company could reach €76 per share. That outcome depends on all planned development projects being executed on schedule and within budget.
EBITDA Growth and Project Breakdown
A central pillar of the investment case set out by JPMorgan is the doubling of core earnings before interest, taxes, depreciation and amortization. The bank projects EBITDA will rise from about €1 billion today to roughly €2.0 billion over the medium term.
According to JPMorgan, about 60 percent of this profit growth is expected to come from lower-risk brownfield expansion projects. Brownfield developments involve upgrading or expanding existing operational sites.
The remaining 40 percent of earnings growth is projected to stem from greenfield initiatives, which refer to brand new industrial ventures. These new activities include gallium production, Circular Metals recycling operations and defense equipment manufacturing.
Commodity Hedging and Market Protection
JPMorgan noted that downside risk for the metals division is limited through financial hedging strategies. METLEN has hedged a significant portion of its exposure to alumina and aluminum through 2028.
This hedging protection safeguards company earnings against an oversupply in the global aluminum market, which analysts forecast will emerge after 2027.
Strategic Importance of Gallium
The investment bank highlighted the strategic value of gallium production for METLEN. The company could become one of the very few commercial suppliers of gallium operating outside China.
JPMorgan emphasized that establishing European production of gallium aligns directly with policy objectives set by the European Union regarding critical raw materials and strategic minerals.
METLEN Energy and Metals is a major Greek industrial conglomerate headquartered in Athens, operating across metallurgy, power generation, renewable energy and infrastructure. JPMorgan Chase and Co. is a global financial services firm and investment bank based in the United States.
