GEA Share Price Reflects Unrealistically Low Performance Metrics; Non-Dairy Improvements Overlooked
We are maintaining our EUR 47 fair value estimate for wide-moat GEA Group following the group's capital markets day and new medium-term guidance, and we believe the market is pricing in overly pessimistic expectations. In our DCF model we use an 8% WACC and to arrive at the current share price, we would need to assume no organic revenue growth (vs. guidance of 3.5%-4.5% on a constant currency basis), an EBITDA margin that is 50-100 basis points below management guidance, and a cash conversion cy...
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