EU Industrials Sector Specialist Commentary: Cap Goods • Chemicals • A&D • Autos • Building Materials

Research evidence excerpt

EU Industrials Sector Specialist Commentary: Cap Goods • Chemicals • A&D • Autos • Building Materials

evident by our c50% upside to fair value), but can see how Schindler is the more attractive of the two

nearer term. We increase our December 2027 price target to CHF350 (was CHF340 to June 2027) based on 18.5x EV/EBITA

our essentially unchanged 2028 forecasts, offering c30% upside.

5. Kone - Early look at Q2’26 Results- Phil Buller hereWe update our model and view ahead of the Q2’26 results on 22 July,

incorporating our discussions with the company, latest top-down data and FX. We expect a continuation of Q1 trends, with no

inflection in New Building Solutions yet, a continued positive trajectory in Services, and the performance in Modernization

supported by the growing installed base. We assume limited disruption from the Middle East conflict so far, and continue to

assume cost inflation is being well managed via price increases to customers, albeit with the usual time lag. Beyond the Q2,

investors will be looking for any updates on the TKE deal, now that all resolutions have been passed at the June EGM. We

wouldn’t be banking on a major announcement with the results, and while the company is unable to say much regarding the

scale and detailed scope of the remedies, we continue to assume these will be c15% or less of TKE (much less as a proportion

of the combined entity), primarily from Europe. Management’s tone during the recent roadshow we hosted was comforting

(see our takeaways here), and whilst the shares may take some time to “work”, we do not foresee a better entry point, and

hence reiterate our OW rating. Assuming the proposed Kone/TKE deal proceeds as we envisage, we would rather own Kone