Morgan Stanley downbeat on elevators & escalators, cuts Schindler

Schindler Holding AG

17/06/2025 09:20

** Morgan Stanley is downbeat on prospects for elevator & escalators makers, citing challenges in the new equipment market and their ability to grow in services

** It cuts Schindler SCHP.S to "underweight" from "equal-weight", saying its high exposure to the risky Chinese and U.S. markets impact earnings prospects, while shares appear to be overvalued

** MS reiterates its "underweight" rating on Kone KNEBV.HE as it views the company's revenue and margin targets as "overly ambitious"

** The broker does not expect the Chinese market for new equipment to recover to levels seen before its peak in 2021

** It also takes a cautious view on the manufacturers strategic shift to services, as historically markets in this segment have been contested by internet service providers

** It notes that the market for modernisation of aging elevators in North America and the EMEA region does not seem like an adequate alternative source of demand in terms of profitability, according to the broker

 (Reporting by Simon Ferdinand Eibach)

 ((Simonferdinand.eibach@thomsonreuters.com))