FLSmidth (CPSE:FLS): Reassessing Valuation After ABG Sundal Collier’s Upgrade to ‘Buy’

FLSmidth (CPSE:FLS) climbed after ABG Sundal Collier lifted its rating to buy, highlighting expectations of healthier orders as metal prices rise and as the group moves beyond a restructuring phase.

See our latest analysis for FLSmidth.

The upgrade adds to a year where FLSmidth’s share price has delivered a solid year to date gain despite a softer 30 day share price return, while the three year total shareholder return nearly doubles investors’ money and signals that momentum is broadly intact.

If this kind of rerating has you rethinking your watchlist, it could be a good moment to discover aerospace and defense stocks as another pocket of potential opportunity.

Yet with shares already rallying this year and analysts still seeing upside to their price targets, the real question is whether FLSmidth remains undervalued today or if the market is already pricing in its next leg of growth.

Most Popular Narrative Narrative: 13.2% Undervalued

With the latest fair value set above FLSmidth’s last close of DKK 408.6, the prevailing narrative implies meaningful upside if its margin story plays out.

Ongoing disposal of the low-margin Cement business, portfolio simplification, and a focus on high-aftermarket potential equipment will free up capital, reduce risk, and enhance overall return on invested capital, supporting improved cash generation and shareholder returns over time.

Read the complete narrative.

Curious how shrinking revenues can still support a richer valuation multiple and rising profits? The narrative leans on one powerful margin and cash flow equation. Want to see exactly how those moving parts add up to that upside?

Result: Fair Value of $470.88 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, persistent softness in capital equipment demand or execution missteps on the service-led transformation could quickly challenge today’s undervaluation story.

Find out about the key risks to this FLSmidth narrative.

Build Your Own FLSmidth Narrative

If the story outlined here does not quite match your view, you can dive into the numbers yourself and build a custom take in just a few minutes, Do it your way.

A great starting point for your FLSmidth research is our analysis highlighting 4 key rewards and 2 important warning signs that could impact your investment decision.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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