On Wednesday, Deutsche Bank (ETR:DBKGn) updated its financial outlook for Schindler Holding AG, listed on the Swiss Exchange as SCHN:SW and over-the-counter as OTC: SHLAF, by increasing the price target to CHF 246.00, up from the previous CHF 243.00. The firm has maintained a Buy rating on the stock.
The adjustment comes ahead of Schindler's second-quarter results, which are scheduled to be released on July 19th. Deutsche Bank anticipates that Schindler's ongoing efforts to enhance profitability will be fruitful, particularly as the company works through a dilutive backlog that has been impacting margins.
Deutsche Bank's analysis takes into account recent changes in foreign exchange rates and wage inflation. Despite these factors, the bank forecasts a compound annual growth rate (CAGR) of approximately 8% for Schindler's adjusted earnings before interest and taxes (EBIT) from FY23 to FY26, and around 9% for adjusted earnings per share (EPS).
The rationale behind Deutsche Bank's optimistic stance on Schindler is partly due to the company's lower exposure to the Chinese market. Additionally, Schindler's substantial installed base of units is seen as a key advantage for the company's growth prospects. Deutsche Bank's estimates for Schindler are reported to be in line with or slightly ahead of the general market consensus.
InvestingPro Insights
As Schindler Holding AG (SCHN:SW, OTC: SHLAF) prepares to release its second-quarter results, an analysis of real-time data from InvestingPro provides a deeper understanding of the company's financial health and market position. Schindler boasts an impressive gross profit margin of 41.81% over the last twelve months as of Q4 2023, which aligns with Deutsche Bank's expectations of profitability enhancements. Furthermore, the company's revenue growth has been steady, with a 5.05% increase over the same period.
InvestingPro Tips highlight Schindler's robust financial footing, including a perfect Piotroski Score of 9, indicating a strong financial position. Additionally, the company holds more cash than debt on its balance sheet, which may offer flexibility to navigate economic fluctuations and invest in strategic growth initiatives. Notably, Schindler has maintained dividend payments for 18 consecutive years, suggesting a commitment to shareholder returns.
With a market capitalization of 136.05 billion USD and a P/E ratio of 31.78, Schindler is trading at a valuation that reflects its near-term earnings growth potential. Analysts predict the company will be profitable this year, supported by the data showing a positive one-year price total return of 44.36% as of the latest available date. These metrics and insights could provide investors with added confidence in the company's future performance.
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