Andritz confirmed at BUY, TP EUR 50 - Forecast and target price upgrade ahead of Q1 reporting
We confirm our BUY recommendation and raise our target price to EUR 50 (EUR 37) on the back of a lower discount rate, higher forecasts and the sector reratingWe expect increasing earnings and good order book momentum excluding the large EUR 500 mn Pulp&Paper order recorded in Q1 20
Competitor Valmet has already increased its FY 20 outlook to improving sales and EBITA yoy, citing good markets in Pulp&Paper, automation and now also services; Andritzs management might wait for additional visibility before touching the slightly declining sales and flat adj. EBITA guidance
Potential mid-term upsides to our forecast are improving hydro investment conditions in the U.S. following Bidens infrastructure bill and M&A
Andritzis develops production systems and industrial process solutions for standard and specialized products. Co. maintains five business areas. Pulp and Paper provides technology and services for production of various grades of pulp and fiber for the manufacture of paper, board and tissue. Metals develops and manufactures plants for the production of cold-rolled carbon steel, stainless steel, and non-ferrous metals strip. Environment and Process provides products and services for mechanical and thermal solid or liquid separation. Feed and Biofuel develops and produces equipment for production of feed. Hydro supplies turnkey electromechanical equipment and services for hydro power plants.
The Institutional Equity Research team of Raiffeisen Bank International AG covers 85 stocks from Austria, Central & Eastern Europe with sell-side research and thus levers our local broker status with excellent company relationships. For corporates in Austria, CEE and Western Europe, we offer co-sponsored research, which includes research coverage and marketing activities to investors. Additionally, through our Spotlight Research product we also shed light on leading European small and micro-caps, seeking greater visibility with investors.
The Institutional Equity Research team consists of roughly 15 analysts, both in Vienna and the CEE countries. Our analysts provide long-standing sector expertise in tandem with profound local market know how and a sectoral approach across the entire region.
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