Berenberg sees industrial engineering markets set to contract

Deutz AG

16/08/2023 13:31

** Berenberg anticipates European industrial engineering cos
Deutz  DEZG.DE , Palfinger  PALF.VI  and Wacker Neuson
 WACGn.DE  experiencing a contraction in their end-markets,
citing lowering volumes and renegotiation with customers
    ** Following two years of record growth, the broker deems
resilient U.S. end markets not enough to offset high customer
inventories and uncertainties hampering order intake
    ** Top pick is Wacker Neuson ("buy"); deems sharp valuation
discount to its peer group not representing the fair value of
co, given rollout in the U.S. and upside regarding both revenue
and profitability in the mid-term
    ** Cuts Palfinger to "hold" from "buy", flagging headwinds
from weaknesses in European and construction end-markets, which
prompts broker to cut revenue and EBIT forecast by 10% and 14%
respectively, for FY24
    ** Broker keeps "hold" rating on Deutz, highlighting
EBIT-margin improvement led by price increases, which did more
than only offset increasing input costs
    

 (Reporting by Jorrit Donner)
 ((Jorrit.donner@thomsonreuters.com))