Rosenbauer confirmed at HOLD, TP EUR 54.5 - Cost pressure to limit margin upside in the next few quarters
We have lowered our earnings forecasts and consequently reduce the target price to EUR 54.5 from EUR 56.5 while maintaining the HOLD ratingWe sense that the burden of cost inflation and supply chain bottlenecks is more perceptible than previously thought, underscored by the fact the FY 21 margin guidance of ~5% now incorporates an extraordinary gain from the waiver of COVID-19 liquidity support
Given the long lead times of the business model and arguably rather low visibility as regards the normalisation of procurement, we think that the profitability might by impacted also in early FY 22e
The planned working capital reduction should spur the FCF generation in the current year but we expect a normalisation of yields beyond FY 21e
Rosenbauer International is a holding company. Co. through its subsidiaries is engaged in the manufacture, sale and distribution of mobile fire protection and civil defense solutions. Co. maintains five business segments: vehicles, aerials, fire and safety equipment, service and spare parts/others, fire fighting components. Co.'s product portfolio includes a range of municipal fire fighting vehicles and aerials built to both European and the United States standards, series of aircraft rescue and fire fighting vehicles, industrial fire fighting vehicles, fire and safety components and equipment. Co. provides services and spare parts, instruction and training programs for its products.
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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