First Read: Interpump Group "1Q26 results: 2.2% org growth with diverging..."

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First Read: Interpump Group "1Q26 results: 2.2% org growth with diverging..."

Forecast returns

Forecast price appreciation 5.2%

Forecast dividend yield 1.1%

Forecast stock return 6.2%

Market return assumption 7.8%

Forecast excess return -1.6%

Company Description

Interpump Group is an Italian industrial manufacturer, specialising in hydraulics and water-

jetting. The group is highly diversified in terms of geography, products and end markets, with

a range of cyclical profiles. The business operates a highly decentralised model, a group of

117 companies globally that produce hydraulics, high-pressure pumps and flow handling

components, but are run quite independently. Only functions such as financial reporting and

strategic development are run centrally. Interpump has production facilities across Europe

(including Italy), the US and Asia.

Valuation Method and Risk Statement

We value Interpump using a DCF (9.1% WACC, 3.0% long-term growth).

Risks to Interpump include:

1) Any change in end market dynamics – we see downside risk from prolonged weakness

(particularly in the more cyclical hydraulics business), but potential upside risk from a quicker

than expected recovery in demand – both in terms of earnings and valuation;

2) Input cost inflation or deflation would have a negative/positive impact on our profitability

forecasts – especially around energy, labour and raw material costs;

3) M&A risk – with downside risk around execution and profitability (acquiring margin dilutive

businesses), and/or upside risk if Interpump acquire a high-quality, strategically sensible asset

at a sensible price. The latter could lead to both earnings upgrades and potentially a re-rating

as well;

4) Competition – risk from other players developing new technologies and taking market

share;