Barco Withdrawing FY guidance in challenging market conditions

We lower our Target Price to €12 (€13.2) and maintain our Hold rating as 1Q26 sales came in at a weak -15% y/y €180.6m (KBCS €201.5m, CSS €198.6m). 1Q26 sales were impacted by a strong FX-effect. 1Q26 sales were nevertheless also -8% at constant FX as we saw delayed order conversion and cautious customer decision-making. 1Q26 order intake was € 215.4m (-7% y/y, flat at constant FX) while we were at €221.1m (CSS €222.4m), overall impacted by geopolitical uncertainty, while showing strength in Entertainment. So 1Q26 unfolded against a backdrop of heightened uncertainty, particularly in the US and the Middle East.
Our new € 12 TP takes into account that Barco highlighted that in the current environment, the pace and timing of customer investment decisions and order conversion remain uneven across its end markets. Barco warned that -if current macro-economic conditions and geopolitical tensions persist- they may not be able to continue to hold to its previously communicated FY guidance (Recall mid Feb'26 Barco's management expects topline and EBITDA margin growth for FY26 versus 2025, excluding FX effects and that growth would be skewed towards 2H26).
Barco will update its outlook together with the publication of its 1H26 results, including the integration of VerVent Audio Holding. We will further update our model as Barco also maintains its long-term strategic guidance. As the business continues to shift from CAPEX to OPEX models, Barco targets organic growth towards €1.1bn, a 15% EBITDA margin and 15% recurring revenues by FY28.