A potential peace deal between Russia and Ukraine could unlock one of the largest reconstruction efforts in modern history. The World Bank estimates Ukraine will need USD486bn in rebuilding efforts over the next decade, but we estimate this would add only c2% to annual European construction spending. While the direct earnings effect may be modest, we expect the “rebuild Ukraine theme” to drive investor sentiment. We see Volvo, Epiroc, Hexagon, Metso, Hiab and ABB as some of the primary beneficia...
Our analysis shows that Finnish industrials have improved their earnings quality over the past 10 years, supported by expanding Service profitability and shares of total sales and earnings. We believe this together with improved stability, visibility and financials should be better rewarded in the valuations. We have a positive sector stance and highlight Konecranes, Metso and Valmet on potential multiples expansion.
Following stronger-than-expected Q3 orders and earnings and higher 2024 guidance, we have increased our 2024–2026e clean EBIT by c3% on average and our target price to EUR35 (34). We reiterate our BUY. Kalmar’s solid earnings quality and financials remain attractively valued, in our view.
We expect focus to be on Q3 orders and clean EBIT. Our orders, sales and clean EBIT forecasts are largely in line with post-Q2 consensus (pre-Q3 not available). We have lowered our 2024–2026e clean EPS by c2% on average and target price to EUR34 (35), but reiterate our BUY.
Kalmar’s carve-out Q2 results, the first as a standalone company, showed softer-than-expected orders and sales, but earnings were close to our estimate and consensus. We have cut our 2024–2026e clean EPS by c3%. We reiterate our BUY and EUR35 target price.
In the Q2 results due on 8 August (no details available yet), we expect focus to be on orders, any demand comments and clean EBIT. Our Q2e orders, sales and clean EBIT are slightly above consensus. We maintain our positive stance, reiterating our BUY and EUR35 target price on our unchanged 2024–2026e clean EPS.
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