On Thursday, Redburn-Atlantic maintained a Neutral stance on Schindler Holding AG (SCHP:SW) (OTC: SHLAF), with a price target set at CHF 248.00. The firm highlighted that Schindler's third-quarter orders, sales, and adjusted EBIT showed mixed results compared to Vertical-Axis (VA) consensus, with orders up by 2%, sales down by 2%, and adjusted EBIT up by 4%.
Despite these variations, the underlying adjusted EBIT, after removing a one-time disposal gain of approximately CHF 14 million, matched the consensus expectations.
The analysis from Redburn-Atlantic suggests a potential slight decline in fourth-quarter expectations for Schindler, due to intensifying price competition in the Chinese market. Over the past three months, Schindler's performance has exceeded that of the broader sector, with a 7% gain, outstripping the sector’s 2% increase.
In terms of valuation, Schindler is trading at 29.2 times its projected 2025 earnings per share and 18.8 times its projected 2025 enterprise value to EBIT. These figures represent a premium of 52% and 29% over the sector average, respectively. When compared to its competitor Kone, Schindler's metrics show a 17% and 2% premium on the same valuation basis.
The current price target is based on a Discounted Cash Flow (DCF) analysis, which indicates a 3% potential downside from the current share price of CHF 248. Despite the stock's recent outperformance, the Neutral rating suggests that the firm sees limited upside potential relative to the current market valuation.
InvestingPro Insights
To complement the analysis of Schindler Holding AG, let's consider some additional insights from InvestingPro for Schnitzer Steel Industries (NASDAQ:RDUS), Inc. (SCHN), another player in the industrial sector.
According to InvestingPro data, Schnitzer Steel Industries has demonstrated strong financial performance, with a market capitalization of approximately $64 billion USD. The company's revenue for the last twelve months as of Q2 2024 stood at $39.04 billion, showing a modest growth of 1.99% over the same period.
One of the standout metrics for Schnitzer Steel is its impressive gross profit margin of 42.31% for the last twelve months as of Q2 2024. This aligns with an InvestingPro Tip highlighting the company's "impressive gross profit margins," suggesting efficient cost management and potentially strong pricing power in its markets.
Another notable InvestingPro Tip indicates that Schnitzer Steel "holds more cash than debt on its balance sheet." This financial strength could provide the company with flexibility for future investments or to weather potential market downturns, a valuable attribute in the cyclical industrial sector.
It's worth noting that Schnitzer Steel's P/E ratio stands at 35.72, which is relatively high. This valuation metric resonates with another InvestingPro Tip stating that the company is "trading at a high P/E ratio relative to near-term earnings growth." Investors may want to consider this in the context of the company's growth prospects and industry positioning.
For those interested in a deeper dive into Schnitzer Steel's financials and future outlook, InvestingPro offers additional tips and insights. In fact, there are 10 more InvestingPro Tips available for SCHN, providing a comprehensive view of the company's strengths and potential areas of concern.
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