Rosenbauer cut to HOLD, TP EUR 56.5 - Cash flow improvement appears discounted after stellar run
We downgrade Rosenbauer to HOLD from BUY as the new target price of EUR 56.5 (EUR 52) lacks upside potentialSince our mid-November upgrade the stock has risen by ~55% and at this stage the working capital-related FCF potential is sufficiently discounted, in our view
We give the company the benefit of the doubt as regards the realisation of another WC-release in the current year. While this renders a stellar FCF yield (17%), elsewhere we currently see no incremental trigger
Our and consensus forecasts for FY 21e are already somewhat above the margin guidance
Management comments indicate that supply chain issues and cost inflation are manageable
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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