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Investing.com - Goldman Sachs upgraded VAT Group AG (SIX:VACN) from Neutral to Buy and raised its price target to CHF308.00 from CHF301.00.
The Swiss vacuum valve manufacturer has been the worst-performing stock in Goldman Sachs’ coverage over the past 12 months, underperforming the semiconductor index by 38 percentage points. This underperformance reflects delayed semiconductor capital expenditure recovery expectations and concerns about China overstocking and U.S. tariffs.
Goldman Sachs believes the stock has already priced in the lack of semiconductor capital expenditure recovery. The current share price implies a 10% decline in 12-month forward EBIT compared to 2024 levels, which the firm considers unwarranted given its semiconductor capital expenditure tracker showing favorable long-term growth at 15% FY24-28E CAGR.
The investment bank’s analysis suggests limited downside risk, estimating only 20% downside if VAT’s China sales decrease by 50%, compared to 60% upside potential in its bull case scenario. This bull case assumes a return to prior peak deviation from sales trend and peak margin/multiples.
Goldman Sachs forecasts group EBITDA for FY25/26E that exceeds consensus by 3%/5%, despite factoring in margin headwinds of 130bps/40bps from tariffs.
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