Signify: Q2‘26 first take - another earnings miss to lead to MSD cuts to consensus Adj EBITA

研报英文原文证据摘录

Signify: Q2‘26 first take - another earnings miss to lead to MSD cuts to consensus Adj EBITA

Akash Gupta AC Europe Equity Research

(44-20) 7742-7978 24 July 2026 J P M O R G A N

akash.z.gupta@jpmorgan.com

Investment Thesis, Valuation and Risks

Signify (Neutral; Price Target: €19.20)

Investment Thesis

• Good track record on cost savings and cash generation: Despite a lack of growth and

the transition to LEDs, Signify has delivered on cost savings to preserve its high cash-

flow generation.

• Chinese competition has intensified and consumer recovery will take some time:

While Signify has always faced above-sector average Chinese competition, this has

intensified after the US import tariffs, leading to price erosion that cannot be

compensated by cost savings. At the same time, a pick-up in inflation is set to affect

consumer markets, increasing pressure on volumes.

Valuation

Our December 2027 Price Target is based on a reverse DCF valuation. The 12-month

forward target multiple is 7.5x EV/adj. EBITA, applied to our 2028 forecasts.

Risks to Rating and Price Target

Downside risks: 1) Signify could underperform if revenue declines at a faster pace than

expected, leading to a margin shortfall. 2) Lack of good FCF generation could also lead to

underperformance. 3) M&A is an integral part of strategy and if Signify buys companies

above its own trading multiple it could lead to downside. 4) Supply chain headwinds, given

higher sourcing from Asia, could lead to downside. 5) Competitive risks from low-cost

Asian players. 6) Downside from potential new tariffs by the new US administration.

Upside risks: 1) Signify could outperform if revenue declines ease and the non-

conventional segment returns to growth at a faster pace than expected. 2) Should Signify