Q1 trends, estimates, valuation and top picks

The Q1 reports proved that sector companies could maintain record-high margins despite volume declines.

ODDO BHF SECURITIES MORNING NEWS – DETAILED COMMENTS 04/26/2024

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ODDO BHF SECURITIES MORNING NEWS – COMMENTAIRES DETAILLES 26/04/2024

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Metso : Progress on margin reflected with resilience in Q1

>Q1 2024 orders in line but margin below expectations - Metso reported its Q1 2024 results yesterday morning (see first take). They were in line with expectations on order intake, but below expectations on adjusted EBITA (-7%).Order intake was down -6% on an organic basis (consensus -5.8%), but up 10.5% sequentially, confirming the rebound in activity that the group was anticipating in the Aggregates division (particularly in the US). Sales were down -7% on ...

Metso : Les progrès sur la marge se ressentent avec sa résilience au T...

>T1 2024 avec des commandes en ligne mais en dessous des attentes sur la marge - Metso a publié hier matin ses résultats T1 2024 (voir first take) qui étaient en ligne avec les attentes sur les prises de commandes, mais en dessous sur l’EBITA ajusté (-7%).Les prises de commandes étaient en recul de -6% en organique (css à -5.8%), mais en hausse séquentielle de 10.5%, confirmant ainsi le rebond de l’activité qui avait été anticipé par le groupe dans la division A...

Metso (Buy, TP: EUR13.00) - Small profit miss, but positives too

Q1 profits missed in a seasonally small quarter but also included positives: solid profitability, and strong Aggregates and Service orders. We have cut our 2024–2026e clean EPS by c3% and reiterate our BUY and EUR13 target price. The valuation remains attractive, in our view.

Q1 miss, but also demonstration of resilience

Orders and margins fine, but equipment sales gap, EBITA -8%. Adj. EBITA'24e-'26e down 2-3%. Not worrying, and good end-market and value support - BUY

ODDO BHF SECURITIES MORNING NEWS – DETAILED COMMENTS 04/25/2024

Having flirted with the 495-point mark on Friday, which could have triggered an extension of the correction, the market has rebounded well since then. Our technical analysis highlights a configuration in which we are only at the start of a powerful rally. Target of 622 points for Stoxx 600 index (+11%) by the end of the year confirmed. Prefer banks to insurance companies in the short term. - ...

ODDO BHF SECURITIES MORNING NEWS – COMMENTAIRES DETAILLES 25/04/2024

Après avoir frôlé vendredi la barre des 495 points qui aurait pu déclencher la poursuite de la correction, le marché a ensuite bien rebondi. Notre analyse technique met en lumière une configuration où nous ne serions qu’au début d’un rallye puissant. Objectif 622 points (+11%) d’ici à la fin de l’année confirmé sur le Stoxx 600. Préférer les banques aux assurances à court terme. - ...

Metso : Reassuring Q1 orders but results are below expectations

>Q1 2024: orders down -6%, sales down -7%, adjusted EBITA margin of 16.5% - Metso this morning reported Q1 2024 results that were 7% below expectations at adjusted EBITA level. Order intake was € 1,361m (consensus € 1,361), down -6% on an organic basis (consensus -5.8%). Orders were up sequentially in both divisions with improved market activity in Aggregates (driven by the US) and in Minerals (Services). Sales were down -7% (consensus -2.4%) on an organic b...

Metso : Reassuring Q1 orders but results are below expectations

>Q1 2024: orders down -6%, sales down -7%, adjusted EBITA margin of 16.5% - Metso this morning reported Q1 2024 results that were 7% below expectations at adjusted EBITA level. Order intake was € 1,361m (consensus € 1,361), down -6% on an organic basis (consensus -5.8%). Orders were up sequentially in both divisions with improved market activity in Aggregates (driven by the US) and in Minerals (Services). Sales were down -7% (consensus -2.4%) on an organic b...

Deliveries fall short, margins hold up

Heads-up for report 25 April

FLSmidth (Buy, TP: DKK400.00) - Another transformation year

Ahead of the Q1 results (due at 07:30 CET on 15 May), we have made relatively minor estimate changes, raising our 2024–2026e clean EPS by c2% on average. We reiterate our BUY, and have raised our target price to DKK400 (370).

Metso (Buy, TP: EUR13.00) - Possible optimism in the air

We have raised our 2024–2026e clean EPS by c2% on average ahead of Q1 results, where we will focus on orders, profitability and the outlook. We reiterate our BUY, and have raised our target price to EUR13 (12.5), continuing to view Metso’s end-market exposure, profit expansion potential and valuation as attractive.

ODDO : Favour Metso while waiting for the next cycle

We are initiating coverage of the mining equipment segment with Metso on Outperform, Sandvik on Neutral and Epiroc on Underperform. We have adopted a cautious scenario with demand stable or slightly up in the short term (mining business sales up +3% on average between 2024 and 2026), pending positive signals indicating a rebound in greenfield investments (not before 2027, in our view). In this scenario, we think that Metso should confirm the progress achieved in 2023 (margin impr...

ODDO : Privilégier Metso dans l’attente du prochain cycle

Nous initions le segment des équipementiers miniers avec Metso à Surperformance, Sandvik à Neutre et Epiroc à Sous-performance. Nous adoptons un scénario prudent avec une demande stable ou en légère hausse à court terme (CA des activités minières en hausse moyenne de 3% entre 2024 et 2026), dans l’attente de signaux positifs indiquant un rebond des investissements greenfield (pas avant 2027 selon nous). Dans ce scénario, nous estimons que Metso devrait confirmer les progrès réali...