Bucher "CEMA tracker - sequentially weaker both in absolute and relative terms"

Research evidence excerpt

Bucher "CEMA tracker - sequentially weaker both in absolute and relative terms"

a result, we estimate that over half of

12/26E 17.70 19.39

Bucher’s group sales and operating income is connected, either directly or indirectly, to

12/27E 17.91 21.46

the agriculture end market.

12/28E 18.40 22.86

Bucher’s share price discounts an even more cautious view Sebastian Vogel, CFA

The y/y fluctuations in Bucher’s stock price have historically seen a reasonably high Analyst

sebastian.vogel@ubs.comcorrelation with y/y variations in the CEMA survey. Assuming that this correlation

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persists, we anticipate that Bucher’s current stock price discounts an even more cautious

view relative to the most recent CEMA survey print. Furthermore, Bucher’s previous Patrick Rafaisz, CFA, FRM

stock price momentum has also shown a solid correlation with global manufacturing Analyst

patrick.rafaisz@ubs.com

PMIs. However, Bucher’s latest share price seems to have decoupled from latest PMIs

+41-44-239 90 66

and to reflect also a more cautious view.

Valuation: DCF-derived PT of CHF338/conclusion

We derive our PT of CHF338/share using a DCF. Our long-term assumptions for terminal

growth rate/WACC remain at 2.0%/7.8%, respectively. In our view, the further decline

in the CEMA Business Barometer highlights an increasingly unfavourable outlook for

European agricultural machinery manufacturers. This suggests to us that the recent

order growth moderation at Bucher’s Kuhn Group was likely not only due to a strong

previous pre-ordering season.

Highlights (CHFm) 12/23 12/24 12/25 12/26E 12/27E 12/28E 12/29E 12/30E

Revenues 3,575 3,156 2,914 2,856 2,909 2,943 3,008 3,088

EBIT (UBS) 424 283 238 218 221 227 237 249

Net earnings (UBS) 352 227 200 176 178 183 192 202