(Telestock) – Equity has improved to “Buy” 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, while at the same time lowering the target price to 19.6 euros per share from the previous 21 euros.
After the underperformance (YTD -34%), the upgrade has arrived for: derisking on estimates (with today’s reduction in estimates, the risk of further cuts is now less evident also in light of the first tangible signs of recovery in the Refrigeration world and the normalization of stocks in the main markets (ex HPS); structural trends (intact, with Carel continuing to offer exposure to an umbrella of structural trends: 1) Data centres, 2) Heat pumps 3) Energy efficiency of the Food Retail world; theBolt-on M&A can restart, with Carel’s financial structure which is very solid – practically cash-neutral in 2023 ex IFRS 16 – and the expectation that Carel will return to carrying out bolt-on M&A operations in the components/services world, where the track record is good.