KRN: Order Momentum And Margin Resilience Will Support Further Share Upside

Analysts have nudged their fair value estimate for Krones slightly lower to about EUR 154 from roughly EUR 156, even as they highlight resilient margins and an anticipated continuation of strong order momentum, which is reflected in recent price target revisions on the Street.

Analyst Commentary

Bullish analysts point to a healthy order backdrop and resilient execution as key drivers supporting Krones' valuation, even amid a modest trim to fair value estimates. Recent target price increases signal confidence that the company can sustain its growth trajectory into the coming quarters.

At the same time, more cautious voices highlight that, after a strong run in the shares, the risk reward profile has become more balanced, with limited upside if execution or demand trends soften.

Bullish Takeaways

• Bullish analysts see the anticipated pick up in Q3 orders, and expectations for this to continue into Q4, as evidence that Krones can sustain above trend growth in its core markets.
• Confidence expressed by management about ongoing positive momentum is viewed as a sign that the company has good visibility on its backlog and near term revenue pipeline.
• Target price increases, to levels above the current fair value estimate, reflect the view that Krones can continue to execute on pricing and efficiency, supporting margins and cash generation.
• The maintained positive rating on the shares suggests that bullish analysts still see scope for upside as orders convert into revenue and earnings over the next 12 to 18 months.

Bearish Takeaways

• Bearish analysts argue that, after the share price outperformance, the valuation already discounts much of the recent order strength, limiting further rerating potential.
• The downgrade to a more neutral stance signals concern that upside is now more dependent on flawless execution, with little room for disappointment on orders or margins.
• Some caution that a higher interest rate environment and macro uncertainty could slow investment decisions from customers, challenging the sustainability of current order momentum.
• With price targets clustering closer to current trading levels, bearish analysts see a more balanced risk profile, where any slip in growth or profitability could trigger a pullback in the shares.

Valuation Changes

• Fair Value Estimate edged down slightly from about €156.20 to roughly €153.78 per share, reflecting modestly more conservative assumptions.
• Discount Rate has risen slightly from around 5.84 percent to about 6.16 percent, implying a marginally higher required return and lower present value of future cash flows.
• Revenue Growth was trimmed slightly from approximately 6.06 percent to about 5.90 percent, signalling a modestly slower expected top line expansion.
• Net Profit Margin improved marginally from roughly 6.22 percent to about 6.30 percent, indicating a small uplift in expected profitability despite softer growth assumptions.
• Future P/E eased slightly from about 14.0x to roughly 13.6x, pointing to a modest derating in the forward earnings multiple applied to Krones.