Degroof Petercam on Monday maintained its buy recommendation on Argan, but lowered its target price on the stock from €94 to €81 to take into account a higher weighted average cost of capital (WACC) assumption.

In a research note, the analyst highlights a company with a "solid growth engine" in the logistics market and good development prospects.

Nevertheless, he expresses concern about the spectre of a forthcoming debt refinancing, a factor he believes could penalize future earnings growth.

After several years of steadily building up its asset portfolio, Argan has decided to focus on reducing its debt, and to finance its new projects through the disposal of old ones, he points out.

Degroof Petercam concludes that the management team has set itself the target of reducing its net debt-to-equity ratio (LTV) to around 40%, compared with 45% at the end of 2022.

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