Inbox: Berenberg-Analysten zu Palfinger: Wiederbeschaffungszyklus im Fokus

Das sagen die Analysten zu Palfinger (Buy, TP 45 Euro)

Replacement cycle supports growth

● Our view in a nutshell: Palfinger is the leading premium player in an oligopolistic industry with high entry barriers. It manufactures mounted, mobile lifting and load handling solutions (cranes, hydraulic lifting solutions), holding a dominant market share of c30% in its core products (truck-mounted cranes) in Europe (over 50% of revenues). Its dense sales and services network in this region creates a significant barrier to entry, sustaining the oligopolistic industry structure. Palfinger is a strong beneficiary of the ongoing replacement cycle in Europe and continued growth in US residential construction. We believe that a healthy economic backdrop coupled with a premium market position and the conclusion of restructuring measures in the US this year will drive further top-line growth, market share gains and margin expansion.

●  Recent trends and outlook: Palfinger grew the top line by 2.5% in the third quarter versus difficult comps, continuing the growth trend from earlier this year. Growth was driven by positive developments in the Land segment (+3.8%), where Palfinger continues to gain market share, which offset some weakness in the Sea division (-3.7%). Further, exceptionally high capacity utilisation, especially in Europe, resulted in strong adjusted EBIT growth of 10.7% to EUR28m (+60bp margin improvement to 8.3%) in the same quarter. Order intake remains high, with good visibility over the next 1-2 quarters. Restructuring in North America should conclude this year, paving the way for future margin expansion as this region generates c20% of Land sales but only a low single-digit EBIT margin so far.

●  Key questions for management: What are Palfinger’s views on the state of the replacement cycle in Europe? Has the marine cycle bottomed out? Which end-customer industries is Palfinger exposed to in this segment? What kind of margins can we expect from this division? What will drive growth and profitability in the US next year? Is the company looking at further M&A opportunities?

●  Valuation, and where we differ from consensus: Palfinger trades at a 9% discount to its peer group of equipment handling manufacturers on 2018E EV/EBIT (12.5x versus 13.8x average) despite a much better margin profile. Our current target price of EUR45.00 is derived using a DCF approach. We are broadly in line with consensus on 2017/18/19E sales and EBIT.