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On Thursday, Citi analysts adjusted their outlook on Schindler Holding AG (SCHN:SW) (OTC:SHLAF), raising the price target from CHF255.00 to CHF272.00 while maintaining a Neutral rating on the stock. The revision comes as Schindler’s performance year-to-date has mirrored that of its industry peer, Kone, showcasing the company’s defensive characteristics in the market.
Schindler’s stock has historically traded at a discount compared to Kone, but that gap has significantly narrowed. Despite this shift, Citi analysts have chosen to uphold their Neutral rating, suggesting that while the near-term could witness Schindler outperforming, given its earnings are likely to be in line with expectations amidst sector-wide risks, they remain cautious about the longer-term prospects.
The analysts noted Schindler’s strong free cash flow (FCF) margin as a positive attribute, indicating potential upside risks to cash returns for shareholders. However, they have also revised their earnings per share (EPS) estimates for the years 2025 and 2026 downwards by 2% and 6%, respectively. This adjustment reflects the anticipated softer construction markets and updated foreign exchange rates.
The increase in the price target to CHF272 is attributed to the analysts’ methodology of rolling forward to their 2026 earnings estimates. This forward-looking adjustment takes into account the company’s potential growth and financial outlook in the coming years.
Citi’s commentary on Schindler Holding AG’s stock provides investors with an updated financial metric to consider, while also offering a cautious reminder of the potential challenges that lie ahead for the company and the broader construction sector.
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