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On Wednesday, Deutsche Bank (ETR:DBKGn)’s analyst Robert Sanders updated the price target on VAT Group AG (SIX:VACN:SW), increasing it to CHF290 from the previous CHF270, while maintaining a Hold rating on the stock. The adjustment follows VAT Group’s Capital Markets Day, where the company presented its revised long-range sales forecast through 2029.
The revised sales target for 2027 has been reduced by approximately 20% from the earlier projection set in 2022. VAT Group now anticipates sales to range between CHF1.5 billion and CHF1.7 billion, compared to the former CHF1.8 billion to CHF2.2 billion estimate. This reduction is primarily attributed to foreign exchange (FX) impacts, with the new target based on a USD/CHF exchange rate assumption of 0.83, a 13% decrease.
Despite the lowered sales target, the updated midpoint still exceeds Deutsche Bank’s and the consensus estimates by 5% and 14%, respectively. However, the forecast relies on an optimistic assumption of a $125 billion wafer fabrication equipment (WFE) expenditure in 2027, which is a 7% reduction from previous estimates. The new assumption suggests a substantial increase in 2027, following modest growth projections of 3% and 4% for 2025 and 2026, respectively, from an estimated ~$100 billion WFE spend in 2024.
VAT Group also adjusted its growth outlook for the 2025-2029 period, setting expectations for ’low to mid teens’ growth, aligning more closely with the consensus projection of 11%. This new outlook reflects a more conservative stance compared to the ’low double digits’ growth previously forecasted by the company.
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