Berenberg cuts Kion to 'hold', says continued growth unlikely

Kion AG

22/11/2023 09:28

** Berenberg cuts German truck and industrial supplier Kion
to "hold" from "buy," as it sees continued growth as unlikely
    ** After a record year in order backlog and price increases
of a cumulative 20% since the start of 2022 in Kion's truck
division, Berenberg expects the company´s strong 2023 results to
be followed by "fading pricing tailwinds and sluggish truck
volumes"
   ** However, the brokerage forecasts a volume and margin
recovery in 2025 after an around 10% decline in margin growth in
2023
   ** While Berenberg analysts are "convinced of KION's mid-term
growth prospects," they believe that "consensus remains too 
optimistic on further margin expansion in FY24," and set their
estimates 6% below on adjusted EBIT for 2024 
    ** After shares fell to an 8-year low in September 2022 due
to low margins and high costs in its Supply Chain Solutions
(SCS) segment, Kion has since recovered, with around 80% of new
orders now including price escalation clauses, which Berenberg
believes protects Kion from similar setbacks in future and
"should lead to a continuous margin improvement in the coming
years"
    ** Kion shares are up 22% year-to-date

 (Reporting by Marleen Kaesebier)
 ((Marleen.kaesebier@thomsonreuters.com))