High expectations in a slow market

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High expectations in a slow market

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GEA

Reiterate Rating: UNDERPERFORM | PO: 51.00 EUR | Price: 62.70 EUR

End market demand unlikely to support high expectations 07 July 2026

Despite GEA reiterating FY26 guidance and expressing confidence in the order pipeline, Equity

we believe underlying end-market demand remains insufficient to support the more

optimistic expectations embedded in the stock. While Food and Beverage trends are Uma Samlin >>

slowing in terms of sales, US dairy prices have also weakened significantly in the last Research Analyst

MLI (UK)

month (-13% MoM in June). As a result, we remain cautious on the sustainability of +44 20 7995 1964

elevated growth expectations (8.2% consensus order org YoY in Q2) beyond the near- uma.samlin@bofa.com

term recovery. After adjusting for FX, our Q2 EBITDA is now 1% below consensus, and Benjamin Heelan >>

Research Analyst

our FY26 sales/EBITDA remains 1%/3% below consensus. PO remains €51, Reiterate Merrill Lynch (DIFC)

Underperform rating. +44 20 7996 5723 benjamin.heelan@bofa.com

Cost inflation could affect FY26 margins AlexanderResearch AnalystJones, CFA >>

We expect Q2 to show a modest improvement in profitability but believe the pace of MLI (UK) +44 20 7995 5828

margin expansion remains well below the levels delivered over the past several years. alexander.jones2@bofa.com

Following only 40bps of EBITDA margin improvement in Q1'26, we expect Q2 EBITDA Aron Ceccarelli >>

margins to improve year-on-year to 17% (vs consensus 17.1%) but see limited scope for ResearchMLI (UK) Analyst

a significant acceleration in profitability. We expect FY26 EBITDA margin to be 16.8% +44 20 7996 3827

aron.ceccarelli@bofa.com

(vs consensus 17.1% and guidance between 16.6%-17.2%) driven by cost inflation in its