MS upgrades GEA Group on valuation despite mid‑term growth risks

Signify

23/06/2026 08:53

23 Jun 2026 - ** Morgan Stanley upgrades GEA Group G1AG.DE to "equal-weight" from "underweight" on valuation versus peers, saying a collapse in near-term orders for the German food processing technology supplier looks increasingly unlikely 
** The broker still sees mid-term growth concerns re-emerging later this year, but says 2026 organic revenue growth guidance of 5-7% looks achievable
** It says what has changed is GEA's relative valuation close to relative lows versus peers from the mechanical segment of the capital goods sector
** Shares trade at a roughly 20% discount to peers, while the broker remains underweight on Wartsila WRT1V.HE, Signify LIGHT.AS and Kone KNEBV.HE
** MS says GEA had challenges with cost inflation before 2019, but has had a much more proven track record since then, with its 2027 EBITDA forecast sitting 2% below consensus
** GEA's net cash position and lack of M&A plans raise scope for share buybacks, after completing a €400 million ($457 million) programme in 2025
** The stock has gained 0.87% YTD

($1 = 0.8755 euros)

 (Reporting by Isabela Kruczynska)
 ((isabela.kruczynska@thomsonreuters.com))