On Tuesday, RBC (TSX:RY) Capital initiated coverage on Getlink (GET:FP) (OTC: GRPTF) stock, assigning a "Sector Perform" rating and establishing a price target of €15.50 for the company's shares.
The firm's analysis indicates that the coming years will see a continuation of the normalization process for electricity spreads, specifically after the strong initial performance of the Eleclink interconnector.
The analyst from RBC Capital highlighted that for the year 2025, similar trends from 2024 are expected to persist, with the electricity market stabilizing after the successful launch phase of the Eleclink interconnector. This interconnector has significantly impacted Getlink's business, providing a new revenue stream and influencing electricity prices.
For Eurotunnel, the firm projects that the issues of ferry overcapacity will begin to ease in 2025. This moderation is anticipated to positively influence the company's operations.
Furthermore, the analyst concurs with Getlink management's assessment that the freight volume outlook could see improvements under the current UK government's policies.
However, the analyst also noted that the potential uplift in freight volumes is not expected to significantly impact the company's performance within the year 2025. This suggests that any positive changes in freight volumes may take longer to materialize in terms of financial performance for Getlink.
In conclusion, RBC Capital's initiation of coverage on Getlink with a "Sector Perform" rating and a €15.50 price target reflects a view that the company is poised to continue its steady performance, influenced by market conditions and operational factors such as ferry capacity and government actions.
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