GS starts Carel with 'buy' on sales growth with regulatory boost

Carel Industries SpA

13/02/2023 09:48

** Goldman Sachs starts coverage of Carel Industries
 CRLI.MI  with "buy" as it expects the Italian maker of air
conditioning and refrigeration control systems to outgrow its
end-markets through share gains, international expansion and M&A
    ** GS says companies are likely to prioritize
energy-efficiency in their investment budgets due to
inflationary pressures and emissions regulations, boosting
demand for Carel's heating, ventilation, and air conditioning
technologies
    ** It forecasts a solid 11% organic sales compound annual
growth rate in 2021-2026 and expects the group to expand its
adj. EBIT margin from 16.0% to 16.6% in the same period
    ** "We expect margin expansion to be intentionally
constrained by management's desire to reinvest in further
growing the business," the broker adds
    ** The Carel stock rises around 4% in morning trade, taking
YTD gains to 12.5%
 (Reporting by Romolo Tosiani)
 ((romolo.tosiani@thomsonreuters.com))