Rieter: Recovery benefits backed in, UBS ups to 'neutral'
21/05/2021 13:42
** UBS raises textiles machinery maker Rieter RIEN.S
rating to "neutral" from "sell", saying that industry's cyclical
recovery is reflected in the stock price
** Although the brokerage is still cautious on the long-term
demand outlook for cotton textiles, it expects the spinning
equipment industry cycle to turn more positive following a
period of limited investments
** Following a cyclical industry downturn, intensified by
COVID-19 driven demand headwinds, UBS expects Rieter's sales
prospects to improve materially going forward on the back of
better industry dynamics
** It expects Rieter's top-line compound annual growth rate
(CAGR) of about 26% in 2021-23
** "However Rieter's share price has risen 70% year to date
and we expect it discounts an average revenue growth of 17-18%
(FY21-25E)," UBS says
** Among the six analysts that cover Rieter, three rate it
"strong buy" or "buy," and three "hold"
((Laura.marchioro@tr.com))