Recordati shares could be on the verge of a higher leap
The health sector (represented in Piazza Affari by the FTSE Italia All-Share Health Care index) has been among the worst since the beginning of the year with a performance of +2.5%, well below that of the main index which is around 9.6%. However, after a long hibernation, a share of the Ftse Mib has awakened and could give great satisfaction. We are talking about Recordati which could soon give very important indications about its future.
After a long hibernation, a share of the Ftse Mib has awakened and could give great satisfaction: the indications of the graphic analysis
The title Register (MIL:REC) closed the January 17 session at €41.85, up 4.42% on the previous session.
After about a month of complete immobility, Recordati shares soared, gaining more than 4% with volumes up 110% on the 5-day average. A rise like this hasn’t been seen for over 2 months. The bulls, however, cannot claim victory just yet. Area 42 eurosindeed, represents strong resistance which had already held back the rise of the stock in the past. Overcoming this obstacle could open the door to reaching the 47 euro area first, and then the 51 euro area.
Failure to overcome this obstacle could open the doors to a drop down to the 39 euro area. Only the decisive break of this support, however, could open the doors to a sharp decline.
Excellent bullish cue from Recordati which strengthens its bullish stance – projectionsdiborsa.it
Title evaluation
Recordati shares have a contradictory valuation which depends on the indicator used. Eg, for the price-to-earnings ratioRecordati shares are in line with the Italian sector average. The relationship between price and turnover of the company, then, with a value of 4.8x places it among the most expensive companies worldwide as well as expressing an overvaluation of 50%. Also the Price to Book ratio expresses an overestimation of more than 30%.
The fair valuecalculated using the discounted cash flow method, expresses an overestimation of about 10%.
According to reports in the specialized press, then, for analysts, the average target price expresses an underestimation of 8.4% compared to current prices.
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