UBS cuts Oerlikon to 'neutral' on weak sales ahead, shares drop
06/02/2023 11:30
** Shares of OC Oerlikon OERL.S drop 7.5%, set for worst
day in almost three years, after UBS cuts to "neutral" from
"buy", expecting sales headwinds in 2023/24
** The broker notes that Chinese macroeconomic indicators
suggest deteriorating order and sales backdrop for the Swiss
industrial group's polymer processing segment
** Furthermore, if the upcoming downcycle in the man-made
fibre industry will mimic previous ones, it is likely that
substantial order weakness is ahead, UBS says
** It also points to a "a lacklustre macro backdrop" for
Oerlikon's surface solution segment
** The brokerage now expects organic group sales to decline
9% in FY23 and 11% in FY24, which should lead to negative
operating leverage
** As a results it lowers its EPS expectations by 15%/25%
for FY23/24, respectively
(Reporting by Johannes Toft Thyssen)
((johannestoft.thyssen@thomsonreuters.com))