Palfinger confirmed at HOLD, TP EUR 21 - Model update: Covid-19 taking its toll
We have revisited our model and, reflecting the dramatically changed trading conditions and economic framework, have substantially cut our forecasts throughout FY 22e. Despite the share price correction, we see limited upside for Palfinger shares at the moment and maintain the HOLD rating with a lower target price of EUR 21 vs. EUR 28 before. It goes without saying that visibility is very low. According to the company, order intake plunged in April and it remains blurry at which level demand settles as economies gradually come out of the lockdown/containment measures. The peak of Covid-19 repercussions being centred on Palfingers seasonally strong 2Q is our working assumption but we struggle to believe in a V-shaped recovery of crane demand to the pre-crisis level (particularly for the important European market). Bearing in mind high demand in recent years coupled with potentially lower equipment usage in the near term (given less economic activity), customers might not have imminent replacement need or opt to postpone orders in favour of repairs. Management comments during the 1Q conference call were not particularly revealing on current order intake trends. The management considers April as not representative as amid the broad-based lockdown order intake dried up for about two weeks.Palfinger provides lifting solutions for use on commercial vehicles and in the maritime field. Co. is engaged in providing loader cranes, timber and recycling cranes, marine cranes, wind cranes and hooklifts service. In addition, Co. is engaged in providing tail lifts and high-tech railway systems. Co. offers its products and services primarily to construction industry, transport logistics, public authorities, waste disposal, forestry and agriculture and railway infrastructure. In the marine business, Co. sells worldwide, primarily to customers in deep sea navigation and in the oil and gas industry. Co.'s brand is LIFETIME EXCELLENCE.
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