Report
Barco Expecting a mixed picture in the short run but confident in the future
**correction in text and table on 3Q23 preview versus consensus***For Barco, we expect for 3Q23 (trading update on Wednesday 18 October) to see -as already noticed in 1H23- a mixed picture.
In our updated model, we expect Barco to be more prudent on the FY23E top-line. Recall they were guiding for sales and EBITDA margin to be higher in 2H23 than in 1H23, resulting in an expected high single-digit y/y FY23 sales growth. Impacted by a weak China and HealthCare, we (and Consensus) are now incorporating ‘only' mid-single digit FY23E top-line growth (KBCSe y/y +5.7% to €1.1118m FY23E sales (CSS y/y +4.9% to € 1.110m). But we -as well as Consensus- continue to believe that margins continue to remain strong (KBCSe 14% FY23E EBITDA-margin, CSS 13.9%) due to Barco's ability to pass-on of cost inflation and strict cost control.
As a result, we lower our Target Price from € 30.5 to € 28.4; the average of our updated DCF (€ 28.1) and our SOTP (€ 28.7). Buy rating maintained.
Underlying
Barco NV
Provider
KBC Securities
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Guy Sips
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