Vaisala - Foreseeing a firm end for the year
Vaisala reports its Q4 result on Thursday, 16th of Feb. We expect the company to post double-digit growth and EBIT above the comparison period. With W&E estimate upgrades, we adjust our TP to EUR 41.0 (40.0) and retain HOLD-rating.
Expecting strong Q4
Vaisala guides topline between EUR 500-520m and EBIT between EUR 62-72m for 2022. We expect Vaisala to enjoy a strong end for the year 2022. In our estimates, Vaisala faces a 12% growth by its Q4 topline amounting to EUR 140.0m. We expect W&E to experience a 5% y/y growth in Q4. On the other hand, in Q4, we anticipate IM to record a 23% y/y increase. Even though fixed costs face pressures through front-loaded investments and material costs increase with component shortage, we yet foresee Q4 EBIT improving to EUR 15.2m (10.9% margin). In total, we expect Vaisala’s topline to land a bit above and EBIT a bit below the mid-point of the guidance. With 22E EPS amounting to EUR 1.30, we estimate the BoD to propose a DPS of EUR 0.70.
Outlook as a main interest
According to PM indices, US and Euro Area manufacturing might face declines in the coming months. However, a large recession in Europe seems much unlike with energy shortage resolved. Furthermore, Vaisala’s positioning provides some protection against the slowing economy with investments in renewable energy. For now, the record high order book provides some foundation for growth in H1’23, but the visibility into H2 is yet somewhat foggy. Vaisala has generally been quite conservative in giving its guidance; with the management’s 2023 outlook providing some growth, we foresee the company having good trust/visibility for the full year. Moreover, component availability is set to improve which should provide some lifting support for EBIT.
HOLD with a target price of EUR 41.0
We revised our W&A’s near-term estimates, reflecting a better-than-expected market outlook. With our revised estimates, Vaisala trades approx. in line with its peer group, even below by considering 2023-24 figures. With minor estimate changes, we adjust our TP to EUR 41.0 (40.0). Reflecting neutral valuation, we retain our HOLD-rating ahead of the Q4 result.
Vaisala guides topline between EUR 500-520m and EBIT between EUR 62-72m for 2022. We expect Vaisala to enjoy a strong end for the year 2022. In our estimates, Vaisala faces a 12% growth by its Q4 topline amounting to EUR 140.0m. We expect W&E to experience a 5% y/y growth in Q4. On the other hand, in Q4, we anticipate IM to record a 23% y/y increase. Even though fixed costs face pressures through front-loaded investments and material costs increase with component shortage, we yet foresee Q4 EBIT improving to EUR 15.2m (10.9% margin). In total, we expect Vaisala’s topline to land a bit above and EBIT a bit below the mid-point of the guidance. With 22E EPS amounting to EUR 1.30, we estimate the BoD to propose a DPS of EUR 0.70.
Outlook as a main interest
According to PM indices, US and Euro Area manufacturing might face declines in the coming months. However, a large recession in Europe seems much unlike with energy shortage resolved. Furthermore, Vaisala’s positioning provides some protection against the slowing economy with investments in renewable energy. For now, the record high order book provides some foundation for growth in H1’23, but the visibility into H2 is yet somewhat foggy. Vaisala has generally been quite conservative in giving its guidance; with the management’s 2023 outlook providing some growth, we foresee the company having good trust/visibility for the full year. Moreover, component availability is set to improve which should provide some lifting support for EBIT.
HOLD with a target price of EUR 41.0
We revised our W&A’s near-term estimates, reflecting a better-than-expected market outlook. With our revised estimates, Vaisala trades approx. in line with its peer group, even below by considering 2023-24 figures. With minor estimate changes, we adjust our TP to EUR 41.0 (40.0). Reflecting neutral valuation, we retain our HOLD-rating ahead of the Q4 result.