Vinci Shares Drop 3.5% and Break Below the €121.70 Support Level
During a challenging mid-day trading session, the stock of the concessions and construction group is heavily penalized in a CAC 40 affected by renewed geopolitical tensions in the Middle East. The stock follows the downward trend of French cyclicals and breaks a closely watched technical threshold.
A Break Below the €121.70 Support Distances the Stock from Its Three Moving Averages
Vinci shares fell by 3.56% to €119.10, alongside a CAC 40 that is down 2.25% at the same time. During the session, the stock broke below its €121.70 support level, a threshold it remains under at midday. This movement is coupled with a drop below the three reference moving averages: the price is now 5.38% below the MM20 (€125.87) and 6.67% below the MM50 (€127.61), with the MM200 at €124.28 also lost. The RSI at 56 remains in a neutral zone, indicating that the day's decline is not yet sufficient to create an oversold configuration.
The stock has retreated by 6.81% over the week and 8.81% over three months, gaps that reflect a deteriorating dynamic well before today's session. Two direct comparables are following the same trend, with Eiffage down 3.46% and Bouygues 2.15%, in a context of volatility spike (VIX at 18.63, +19.65%) linked to direct military escalation between Washington and Tehran and Iranian claims of strikes on facilities in Kuwait and Bahrain. Brent crude jumped by 5.70% to $76.09, which mechanically increases fuel costs in the construction sector.
Two Downward Revisions of Price Targets and an Order Book That Does Not Support the Stock
From an analysts' perspective, Vinci has undergone two downward revisions revealed on July 6: Jefferies reduced its target from €145 to €142 while maintaining a buy rating, and Barclays lowered its target from €160 to €145 while keeping an overweight rating. These targets respectively offer a 19.2% and 21.7% upside from the current price. These revisions occur even as the group was securing significant commercial contracts.
On July 6, the British subsidiary FM Conway won several road contracts in Greater London amounting to approximately €70 million annually, while Vinci Construction was selected at the end of June for the second building of the Reims University Hospital (€157 million for the subsidiary). The French construction sector remains weak, with a construction climate at -18.2 in June, order books at -33, and civil engineering activity down 10% over three months according to the FNTP. Investors will be watching the publication of the half-yearly revenue in the coming weeks to assess the operational translation of these contracts.
