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On Thursday, RBC Capital Markets adjusted its stance on Schindler Holding AG, the Swiss elevator and escalator manufacturer, changing its stock rating from "Outperform" to "Sector Perform." This reassessment comes despite the firm’s recent operational advances and a more shareholder-friendly approach to capital allocation.
Nick Housden, an analyst at RBC Capital, acknowledged Schindler’s strong performance over the past three years but noted that the stock’s significant gains since late 2023 have been supported by an expansion in multiples. Schindler’s shares are currently trading at roughly 20 times the estimated 2025 enterprise value to earnings before interest and taxes (EV/EBIT), which represents approximately a 20% premium compared to historical averages and is above that of its peers, Kone and Otis.
While the business is expected to maintain its positive trajectory, Housden believes that the current share price already reflects this optimism. Consequently, the downgrade to "Sector Perform" reflects a more conservative outlook on the stock’s potential for future outperformance.
In conjunction with the rating downgrade, RBC Capital raised its price target for Schindler to CHF310.00 from the previous CHF290.00. The new price target suggests that while the stock may not outperform the market, there is still a modest upside to the current trading levels.
Investors and market watchers will be monitoring Schindler’s stock performance following this update from RBC Capital, as it provides a new perspective on the company’s valuation and future prospects within the industry.
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