Citi has updated its view on AutoStore Holdings Ltd (AUTO: NO), reducing the price target to NOK16.00 from the previous NOK28.00, while maintaining a Buy rating on the stock. Despite the adjustment, Citi's stance on the company remains optimistic based on its valuation and long-term growth prospects.
The firm acknowledges that AutoStore, known for its warehouse automation technology, has recently seen its shares fall to new lows at the start of September.
The market's concerns appear to center on the potential for continued stagnation of the company's top-line revenue or a decline in returns. Industry spending on warehouse automation has been muted, and expectations for micro-fulfilment growth have been significantly lowered.
However, Citi's analyst remains confident in the sector's potential, anticipating a return to double-digit market growth from 2026 onwards.
The upcoming Capital Markets Day (CMD) on 18th September is expected to shed light on customer decision-making processes, the technological advantages of AutoStore, and strategies to overcome barriers to adoption. Although no new financial targets are anticipated to be announced at the CMD, the event will be closely watched by investors and industry observers.
Citi has revised its forecasts for AutoStore for the years 2025 and 2026 downwards by approximately 20%, citing the slower than expected growth ramp-up as the reason for the lowered price target.
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