AutoStore stock rating upgraded by Morgan Stanley on cycle trough

Published 18/08/2025, 09:58
AutoStore stock rating upgraded by Morgan Stanley on cycle trough

Investing.com - Morgan Stanley upgraded AutoStore Holdings Ltd (OL:AUTO) from Underweight to Equalweight and raised its price target to NOK8.00 from NOK5.00 on Monday.

The upgrade follows AutoStore’s Q2 results which indicated that the automation cycle, which had been weakening, troughed in Q1 2025. Morgan Stanley had previously maintained an Underweight rating due to concerns about the automation cycle weakness and uncertainty regarding the company’s mid-to-long-term EBITDA margin trajectory.

AutoStore’s Q2 revenues were down 12% year-over-year but showed a significant 56% quarter-over-quarter improvement. This sequential growth surprised analysts who had expected continued weakness in North American revenues due to U.S. tariffs implemented in Q2.

The unexpected recovery in European demand helped offset North American challenges, leading Morgan Stanley to view the risk to estimates as more balanced going forward. The firm now aligns with consensus estimates for AutoStore over the next few years.

Morgan Stanley had previously expressed concern about AutoStore’s cyclical exposure, noting the company has very little recurring revenue (approximately 3%) in its business mix, making it vulnerable to industry downturns.

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