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On Friday, Deutsche Bank (ETR:DBKGn) analysts downgraded Avolta AG (AVOL:SW) stock from Buy to Hold, adjusting the price target upwards to CHF48.00 from the previous CHF41.70. The revision follows Avolta’s first-quarter performance which, according to Deutsche Bank, was slightly above expectations with a 6.6% year-to-date organic sales growth. This growth reflects the company’s diversified portfolio’s appeal.
Avolta reported a revenue of CHF3.05 billion, aligning with market expectations, and an EBITDA of CHF196 million, which was 2% higher than the consensus estimate of CHF193 million. This represents a 16.3% increase year over year. Despite this, the growth in like-for-like (lfl) sales has shown signs of slowing, decreasing from the 7.7% growth reported for January and February to 6.6% by the end of April.
The slowdown to approximately 5% in the recent months is attributed to the current macroeconomic environment. According to Deutsche Bank’s analysis, based on real-time data from the U.S. aviation sector, there is potential for this deceleration to continue. However, Avolta has maintained its full-year guidance, anticipating an organic growth of 5-7%.
Deutsche Bank’s stance remains cautious, with forecasts for Avolta remaining unchanged but acknowledging an increased risk to the downside. The bank’s analysts have factored in the latest performance indicators and market trends to arrive at the new stock rating and price target for Avolta.
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