CEMA tracker - sequentially broadly stable, but remaining in recessionary territory

Research evidence excerpt

CEMA tracker - sequentially broadly stable, but remaining in recessionary territory

tly, we estimate that over

12/26E 17.89 18.46

half of Bucher’s consolidated revenue and operating income is connected, either directly

12/27E 17.93 20.40

or indirectly, to the agricultural market.

12/28E 18.37 22.11

Bucher’s share price discounts an even more muted backdrop Sebastian Vogel, CFA

The y/y changes in Bucher’s stock price have historically shown a significant correlation Analyst

sebastian.vogel@ubs.comwith y/y changes in the CEMA survey. Assuming that this relationship persists, we expect

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Bucher’s current stock price to discount a more cautious outlook relative to the latest

CEMA survey print. Additionally, Bucher’s historical stock price changes have also shown Patrick Rafaisz, CFA, FRM

a strong correlation with global manufacturing PMIs. However, the recent performance Analyst

patrick.rafaisz@ubs.com

of Bucher’s share price seems to have deviated from the latest PMI figures, implying a

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more subdued outlook.

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 again weak

latest print of CEMA Business Barometer flags a continued challenged outlook for

European agricultural machinery manufacturers, including Bucher's Kuhn Group.

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 2,860 2,917 2,950 3,031 3,111

EBIT (UBS) 424 283 238 219 222 226 238 248

Net earnings (UBS) 352 227 200 178 179 183 193 202

EPS (UBS, diluted) (CHF) 34.38 22.15 19.75 17.89 17.93 18.37 19.40 20.24

DPS (net) (CHF) 13.50 11.00 11.00 8.97 8.99 9.21 9.72 10.15