(Finance) – Kepler Cheuvreux has cut to “Reduce” from “Hold” the recommendation on the title CAREL Industriesa group listed on Euronext STAR Milan and active in the production of components to achieve high energy efficiency in the air conditioning and refrigeration markets, also lowering the target price to 15 euros (downside of 8%) from the previous 18.5 euros.
Analysts write that the company posted a set of Q2 results in line with expectations, but also issued full-year revenue guidance (around €600 million) below their estimates (€622 million) and consensus (€630 million). This is due to a weak Q3 coming, with no sequential improvement expected. Implied Q4 revenue growth is in the range of 10%, supported by signs of improving recovery from customer interactions.
“We believe, however, that before the current multiples (around 30x 1YR FWD P/E, 24x EV/EBIT) start to look acceptable again, it is greater visibility into the speed of exit from the year is needed fiscal 2024 – the research reads – In the meantime, we downgrade our rating, lowering our TP after reducing our FY 2024-26 EPS estimates by 10%+. The company’s long-term outlook remains bright, but in our view risks are tilted to the downside in the near term”.