Zumtobel confirmed at BUY, TP EUR 10 - Guidance upgrade warrants confidence in more resilience
Zumtobel reported strong preliminary Q2 22/23 results and continued its series of convincing quarterly results. Ignited by the strong H1, the management raised the full-year guidance.We have raised our FY 22/23e EBIT to EUR 61 mn but deliberately did not stretch to the upper end of the guidance, which entails a further 20% upside (and suggests EPS of approx. EUR 1-1.10)
We subscribe to concerns that the interest rate hike cycle will drag on European non-residential construction activity but we think that Zumtobel should be able to capitalise on the opportunities arising from elevated energy prices
Under the assumption of a resilient earnings trajectory coupled with more normalised investment needs and even assuming no material working capital reduction, the company should be able to rapidly de-lever further, which in turn should put the groups capital allocation stronger into the limelight
We confirm the BUY recommendation and the target price of EUR 10
Zumtobel is a lighting company based in Austria. Co. offers a full-line range of integral professional lighting solutions, luminaires, light management systems and lighting components for indoor and outdoor applications. Co.'s business activities are carried out primarily through its subsidiary groups: the Lighting Segment (lighting solutions, interior and exterior lighting, electronic-digital lighting and room management systems) and the Components Segment (electronic and magnetic lighting components).
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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