European Machinery: Views into 2Q: Kone better N-T, prefer Schindler on 12mth view

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European Machinery: Views into 2Q: Kone better N-T, prefer Schindler on 12mth view

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02 Jul 2026 00:00:00 ET │ 24 pages

European Machinery

Views into 2Q: Kone better N-T, prefer Schindler on 12mth view

CITI'S TAKE

Vivek Midha, CFA AC

We update our views on the elevator OEMs into 2Q26 results. Schindler +44-20-7500-0732

(Buy) reports on 21st July, while Kone (Neutral) reports on 22nd July. Into the vivek.midha@citi.com

quarter, tactically we think Kone could outperform Schindler given an easier

set-up for quarterly orders. We continue to prefer Schindler into 2H, Klas Bergelind

however, as the set-up on orders becomes easier, the CMD in November +44-20-7986-4018

should be supportive, and consensus margin expansion in 2027E is less klas.bergelind@citi.com

demanding. The potential for accretion from the Kone/TKE deal means that

Kone could become interesting closer to its potential completion, but given Martin Wilkie

how far away completion would be, and the relatively ambitious consensus Siron Ng2027E margin expansion of 70bps given steel cost pressures, we remain on

the sidelines. Avinash Mundhra

Kone — At Kone, we are broadly in line on revenue/EBIT for the quarter, but we see

scope for a healthy beat on order intake. A relatively unchanged demand picture

combined with easier comparables in our view should support a quarterly beat on

orders. We model +6.6% organic order growth vs consensus +3.6%. Our bullish

forecast is driven by Modernization, where we expect +15% organic order growth. As

we update our assumptions around steel and price-cost, we lower our EPS forecasts

by 1%. While Kone has been raising prices to offset cost inflation, fixed-price longer-

term contracts could see some margin erosion. Consensus of 70bps EBIT margin