SFPI Group

The sharp increase in the target price is largely a reflexion of the excellent showing of SFPI in a really difficult 2020. This has confirmed its resilience. The group's positioning is the right one at this juncture (construction and capital goods, both seeing solid demand) but SFPI's proverbial caution means that it looks forward to 2021 with modest ambitions

The 2021 and 2022 jump in earnings expectations is mostly owed to the show of strength that SFPI deployed in H2-2020. The rebound may be slowed by higher input prices from mid 2021 but SFPI's industrial resilience helps reset forecasts substantially higher

Paradoxically the NAV increase stems less from the repricing of underlying assets than from the superb net cash position booked in 2020 (partly through cuts in WCR). The ability to generate FCF is now confirmed in our 2021 forecasts although there may not be any immediate spending on acquired growth.

The DCF too is helped by the stronger net cash position and the rollover to a strong 2023