Jefferies cuts Wacker Neuson as European farming, construction in trouble

Wacker Neuson SE

09/01/2024 11:51

** Jefferies cuts Wacker Neuson  WACGn.DE  to "hold" from
"buy," warning of difficulties in the German construction and
farming machine maker's end markets in Europe
        ** The European agricultural industry is now in "deep
recession territory," Jefferies says, adding that dealers are
not able to pass on orders to end customers
    ** Weeks of farmers protests in Germany haven´t halted the
government's plans to reduce farming subsidies and dealers face 
record-high oversupply in the agricultural machinery industry,
following a period of supply chain constraints
    ** In construction, only North America is showing positive
assessments while European construction has fallen for 7
consecutive months
    ** Jefferies forecasts a 7.5% decline in Wacker Neuson
revenues in FY24 and cuts EPS estimates by 20-25%
    ** It also expects EBIT margins to contract to 8.8% in FY24
    ** The broker lowers target price to EUR 19 from EUR 28
    ** The company's stock slid around 2% after the downgrade

($1 = 0.9140 euros)

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