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BofA Securities raised its price target on Kone OYJ (KNEBV:FH) (OTC:KNYJY) to EUR63.00 from EUR61.00 on Thursday, while maintaining a Buy rating on the Finnish elevator and escalator manufacturer.
The price target increase reflects BofA’s expectation of continued strength in Kone’s modernization and service segments, which the firm believes will support the company’s second-quarter results. BofA increased its estimates by 2-3% based on the anticipated performance of these aftermarket businesses.
Kone faces challenges in its new build segment, according to BofA, while tariff-driven uncertainty in the U.S. market has led to wide guidance ranges from the company. Despite these concerns, BofA notes that direct cost impacts from tariffs are likely to be limited for Kone.
The Chinese market, an important region for Kone, continues to stabilize according to BofA’s analysis. The firm projects that the Chinese market could reach its lowest point by the end of 2025, suggesting potential improvement thereafter.
BofA’s updated price target for Kone’s American Depositary Receipt (ADR) is $35.99, increased from the previous target of $34.72. The firm reiterated its Buy rating, citing how the aftermarket business continues to protect Kone’s growth and margins while concerns about China are already reflected in financial projections.
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