RBC ups SGS to 'sector perform' on ATS acquisition

** RBC ups Swiss testing company SGS SGSN to "sector perform" from "underperform" on SGS' acquisition of U.S.-based Applied Technical Services (ATS), deeming it to have strategic sense and to be discounted cash flow valuation enhancing

** "Global testing, inspection, and certification (TIC) demand remains solid, tariff risks have already peaked, and we think the scope for further material valuation multiple compression is limited at current levels," the broker says

** It estimates the deal to be meaningfully EPS accretive from the first year onwards, with EPS estimates rising by 4% and 5% in FY26 and FY27 respectively

** RBC sees consensus for organic growth and margin expansion across the TIC sub-sector to be sanguine, with an upside earnings risk limited

** Out of 20 analysts that cover SGS SA, seven rate the stock "strong buy" or "buy,"​ ten rate "hold" and three rate the stock "strong sell" or "sell" - LSEG data