Citi cuts Alfa Laval, sees slower order growth

Alfa Laval AB

11/09/2023 08:59

** Citi cuts Alfa Laval  ALFA.ST  to "neutral" from "buy",
saying it expects a slowdown in order growth to hit earnings of
the Swedish engineering group
    ** Citi points to a weakening growth support from governing
policies in Germany and Italy, which has led to a sharp
de-rating of heat pump stocks such as Nibe  NIBEb.ST  
     **  It also notes the softening profitability of the energy
unit and pushes back its order growth expectations to the second
half of 2024 amid lower applications for heat pump subsidies
    ** "With the Energy division representing the main driver
behind the growth acceleration in Alfa’s orders last three years
and with growth fading sharply into year-end and into 1H24 we
err on the side of caution", the broker says
    ** As for the marine unit, Citi expects its orders to peak
in Q3 with order beats more difficult to achieve from Q4
onwards, while still relatively slow deliveries might hit
profitability
    ** Alfa Laval shares are down 2.5% and fall to the bottom of
STOXX 600  .STOXX 

 (Reporting by Boleslaw Lasocki)
 ((boleslaw.lasocki@tr.com))