EUR 200.00 For Business Accounts Only

SIEMENS GAMESA: POOR 1Q’20 ADJUSTED EBIT AND 2020 GUIDANCE CUT (ANÁLISIS BANCO SABADELL)

Poor 1Q’20 adjusted EBIT and 2020 guidance cut. SELL.
The preliminary 1Q’20 Results (to be released on 04/02) came in below expectations in sales (-9% vs. BS(e) and -10% vs. consensus) with € -136 M of adjusted EBIT (vs. € 116 M BS(e) and € 118 M consensus) due partially (around € -150 M) to unexpected costs as a result of problems in 5 projects and in routes, among others. As a result, the company cut its adjusted EBIT margin guidance’20 by -100bps to 4.5%-6.0% (vs. the previous target of 5.5%-7% and vs. 6.4% BS(e) and 6.5% consensus). If we only take into consideration the lower EBIT’20, the impact on T.P. would be limited to -1.2% (and SGRE states it maintains the long-term margin), the uncertainty in the long-term and recurring margins is high: assuming -100bps the worst-case scenario for our current estimate would have an impact of -12%. We place our T.P. Under Revision until the release of the full results.