Last Update 07 Dec 25

Fair value Increased 1.39%

GEBN: Future Margin Resilience Will Likely Offset Elevated Multiple Concerns

Analysts have nudged their price target on Geberit slightly higher, reflecting an improved fair value estimate of CHF 574.75 from CHF 566.88, as they factor in a modestly higher discount rate, slightly softer long term revenue growth, a marginally stronger profit margin, and a small uplift in the assumed future price earnings multiple.

Analyst Commentary

Recent research updates indicate a cautiously constructive stance on Geberit, with modest upward revisions to price targets but ongoing reservations about the share's risk reward profile.

Bullish analysts acknowledge tangible strengths in the business model and cash generation, yet bearish analysts remain concerned about valuation stretch and execution risks in a slower macro backdrop.

Bullish Takeaways

Bullish analysts point to resilient pricing power and disciplined cost control, which support the slightly higher fair value estimate and help underpin earnings visibility despite subdued volume growth.
The incremental lift in the assumed future price earnings multiple is attributed to Geberit's strong brand positioning and leading market share in sanitary products, which are seen as durable competitive advantages.
Steady free cash flow generation and a solid balance sheet are viewed as providing flexibility for shareholder returns and selective growth investments, helping justify a premium versus more cyclical industrial peers.
Long term structural drivers in renovation and water efficient solutions are expected to support mid cycle growth, limiting downside to earnings in a softer macro environment.

Bearish Takeaways

Bearish analysts argue that, even after the modest target upgrade, the shares already discount much of the anticipated margin resilience, leaving limited room for multiple expansion from current levels.
There is concern that slower long term revenue growth assumptions, while realistic, could cap upside to earnings revisions if demand in key European markets remains muted for longer than expected.
Execution risk around maintaining elevated margins in the face of potential input cost volatility and increasing competition is cited as a key reason to retain a cautious stance.
Some see the risk reward skewed to the downside in the near term, given the stock's premium valuation relative to broader European industrials and the lack of clear short term catalysts for meaningful earnings upgrades.

What's in the News

Geberit AG raised its full year 2025 earnings guidance, reflecting stronger than expected growth in the third quarter of 2025 (company guidance).
The company now anticipates net sales growth in local currencies of around 4.5 percent for full year 2025, up from its prior outlook (company guidance).
Net sales in October exceeded the previous year's level and were in line with the upgraded full year top line guidance (company guidance).

Valuation Changes

The Fair Value Estimate has risen slightly to CHF 574.75 from CHF 566.88, reflecting a modestly higher assessed equity value for Geberit.
The Discount Rate has increased marginally to approximately 5.26 percent from 5.21 percent, indicating a slightly higher required return in the valuation model.
Revenue growth has been trimmed slightly to about 4.48 percent from 4.56 percent, pointing to a marginally more cautious long-term top-line outlook.
The Net Profit Margin has edged up to roughly 20.71 percent from 20.68 percent, signalling a very small improvement in expected profitability.
The future P/E has risen modestly to around 29.0x from 28.5x, suggesting a slightly higher assumed valuation multiple for the shares.

Expanding in emerging markets and launching innovative products aligns Geberit with demand trends, strengthening its long-term growth and margin potential.
Strategic investments in automation and sector consolidation are expected to yield cost savings, operating leverage, and increased market share.
Heavy reliance on stagnant European markets, weak pricing power, and slow growth outside Europe threaten Geberit's margins, diversification, and long-term profitability.

Catalysts

About Geberit

Develops, produces, and distributes sanitary products and systems for the residential and commercial construction industry.What are the underlying business or industry changes driving this perspective?

Rising demand for modern sanitation and water-efficient solutions, especially in emerging markets like India, Turkey, and the Gulf region, is driving double-digit sales growth outside Europe; as these geographies become a larger revenue share, they provide a long-term top-line growth engine that is not currently reflected in the valuation.
The company's pipeline of innovative products (e.g., new Duofix, FlowFit, Mapress Therm, and smart shower toilets), aligned with trends in bathroom accessibility and hygiene, positions Geberit to capture future demand from aging populations and increasing renovation activity, supporting margin expansion through premium offerings.
Sustained investment in automation, digitalization, and IT (e.g., AI initiatives and digital marketing) is expected to result in ongoing cost optimization and operating leverage, setting the stage for structural improvements in operating margins and net earnings over the coming years.
Ongoing consolidation in the sanitaryware sector and competitors' slower rebound in activity are allowing Geberit to gain market share (as evidenced in Germany/Europe), which should enable further revenue growth and margin stability as the industry normalizes.
Closure of the Wesel plant is expected to yield significant recurring annual cost savings (~€10 million from 2027 onward), directly enhancing free cash flow and net margins once one-offs are absorbed, which may not be fully appreciated in current market pricing.

Geberit Future Earnings and Revenue Growth

Assumptions

How have these above catalysts been quantified?

Analysts are assuming Geberit's revenue will grow by 4.5% annually over the next 3 years.
Analysts assume that profit margins will increase from 18.8% today to 20.4% in 3 years time.
Analysts expect earnings to reach CHF 726.2 million (and earnings per share of CHF 22.41) by about September 2028, up from CHF 585.4 million today. The analysts are largely in agreement about this estimate.
In order for the above numbers to justify the analysts price target, the company would need to trade at a PE ratio of 28.0x on those 2028 earnings, down from 32.6x today. This future PE is lower than the current PE for the GB Building industry at 32.6x.
Analysts expect the number of shares outstanding to decline by 0.21% per year for the next 3 years.
To value all of this in today's terms, we will use a discount rate of 5.11%, as per the Simply Wall St company report.

Geberit Future Earnings Per Share Growth

Risks

What could happen that would invalidate this narrative?

Geberit's growth remains heavily dependent on Europe, particularly mature markets like Germany, Switzerland, and Western Europe, which face stagnating or even declining new build activity and only stabilization-not recovery-in the near-term outlook; this geographic concentration exposes the company to regional economic weakness, risking long-term revenue growth.
Persistently high inflation in wages (3–4% full year, with spikes to nearly 6%) and significant volatility in energy costs (up 21% in H1, with 36% increases in Q1) have outpaced Geberit's negligible pricing power in recent quarters, compressing margins and threatening sustainable long-term net earnings improvement if cost escalation continues.
Weakness in key growth markets outside Europe, notably ongoing declines in China and only partial offsets in regions like Far East Pacific, suggests that international expansion may be less robust than needed; slow or volatile growth in these regions could limit the company's ability to diversify revenues and mitigate margin pressures.
Flat to negative sales price effects-resulting from minimal ability to increase prices (e.g., price changes largely offset by selective reductions in Switzerland and delayed implementation)-undermine Geberit's capacity to defend margins against rising costs, which over multiple years could erode net margins and earnings.
The closure of the Wesel ceramics plant, while reducing some costs longer-term, represents a broader risk of product portfolio maturity and potential need for restructuring as demand shifts and cost pressures persist; recurring restructuring charges or underwhelming product innovation could threaten operating margins and long-term profitability.

Valuation

How have all the factors above been brought together to estimate a fair value?

The analysts have a consensus price target of CHF547.294 for Geberit based on their expectations of its future earnings growth, profit margins and other risk factors. However, there is a degree of disagreement amongst analysts, with the most bullish reporting a price target of CHF696.0, and the most bearish reporting a price target of just CHF412.0.
In order for you to agree with the analyst's consensus, you'd need to believe that by 2028, revenues will be CHF3.6 billion, earnings will come to CHF726.2 million, and it would be trading on a PE ratio of 28.0x, assuming you use a discount rate of 5.1%.
Given the current share price of CHF579.2, the analyst price target of CHF547.29 is 5.8% lower. The relatively low difference between the current share price and the analyst consensus price target indicates that they believe on average, the company is fairly priced.
We always encourage you to reach your own conclusions though. So sense check these analyst numbers against your own assumptions and expectations based on your understanding of the business and what you believe is probable.

Have other thoughts on Geberit?

Create your own narrative on this stock, and estimate its Fair Value using our Valuator tool.

Create Narrative

How well do narratives help inform your perspective?

Disclaimer

AnalystConsensusTarget is a tool utilizing a Large Language Model (LLM) that ingests data on consensus price targets, forecasted revenue and earnings figures, as well as the transcripts of earnings calls to produce qualitative analysis. The narratives produced by AnalystConsensusTarget are general in nature and are based solely on analyst data and publicly-available material published by the respective companies. These scenarios are not indicative of the company's future performance and are exploratory in nature. Simply Wall St has no position in the company(s) mentioned. Simply Wall St may provide the securities issuer or related entities with website advertising services for a fee, on an arm's length basis. These relationships have no impact on the way we conduct our business, the content we host, or how our content is served to users. The price targets and estimates used are consensus data, and do not constitute a recommendation to buy or sell any stock, and they do not take account of your objectives, or your financial situation. Note that AnalystConsensusTarget's analysis may not factor in the latest price-sensitive company announcements or qualitative material.

Emerging Markets And Digitalization Will Redefine Global Sanitation