Frigoglass up as Eurocorp raises target price to EUR 8.70

Shares in Greek glass and plastics manufacturing group Frigoglass were rising after its target price was raised to EUR 8.70 from EUR 7 by broker Eurocorp, on news that the group had reached an agreeme…

Shares in Greek glass and plastics manufacturing group Frigoglass were rising after its target price was raised to EUR 8.70 from EUR 7 by broker Eurocorp, on news that the group had reached an agreement to dispose of its stake in PET resin company VPI. At 1.00 pm, Frigoglass was up 3.9% to EUR 8, with the ASE general index up 0.85% to 3,634.44 points. Eurocorp said that the company announced that it reached an agreement for the sale of its 51% stake in VPI to Selenis Hellas for EUR 15 million. The broker noted that VPI has been the groups laggard and has tied up significant capital, contributing only 3% or the groups nine-moth net income. VPIs downbeat performance was attributed by the broker to rising raw material costs, which have kicked into the margins very aggressively over the last two years, eating up all potential profits. Eurocorp said that disposing of VPI will improves Frigoglass margins and returns despite slashing turnover by 21%, and added that the stock price has already jumped significantly since it released its nine-month results, in light of which the broker maintained its add recommendation.