Bouygues was among the biggest risers on the CAC 40 on Wednesday on the Paris Stock Exchange, with Morgan Stanley raising its recommendation from "underweight" to "in line" with a target price increased from €36 to €44, due in particular to the strong performance of its engineering subsidiary Equans.

At around noon the stock was up about 1%, while the flagship index was down 0.3%.

Morgan Stanley highlighted the solid performance of the multi-technical services subsidiary Equans, which it believes is exceeding expectations in terms of margins and cash generation.

Beyond this successful restructuring, the broker believes that the revival of Equans' revenue growth, as well as a resumption of acquisitions, could continue to fuel the stock's revaluation.

The analyst also highlights the attractive free cash flow (FCF) yield posted by the French conglomerate, which he estimates at between 9% and 11% over  2025-2027, which should enable it to reduce its net debt to less than one times EBITDA while limiting the risk to earnings, thus providing a relative floor for the share price.

While this target price already implies upside potential of 19%, Morgan says it sees additional upside if concentration were to occur in the French telecoms landscape.