Citi cuts GEA Group to 'neutral', sees abating mix tailwinds from H2

GEA AG

19/05/2025 12:35

** Citigroup downgrades German food processing technology supplier GEA Group G1AG.DE to "neutral" from "buy" citing concerns over weakening mix tailwinds

** "We see the gross margin improvement as of late driven by mix tailwinds set to abate from 2H," the broker says

** Citi notes GEA's recent margin gains were boosted by an increase in its share of service sales, which are more profitable than machine sales

** But the current product mix is unsustainable and projects a fall in profitability as the backlog gets delivered, Citi says

** "We still like the long-term margin story, but after 40% outperformance last 12 months we now see the risk/reward more balanced," it adds

** Out of 19 analysts that cover GEA Group, seven rate it "strong buy" or "buy",​ ten "hold" and two​ "strong sell" or "sell"​

 (Reporting by Simon Ferdinand Eibach)

 ((Simonferdinand.eibach@thomsonreuters.com))