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On Wednesday, Berenberg initiated coverage on JOST Werke AG (JOST:SW) stock, a key supplier of safety-critical components for the truck, trailer, and agricultural industries, with a Buy rating and a price target set at EUR55.00.
The firm highlighted JOST's dominant market position, boasting approximately 60% market share in fifth wheels and landing gear, as well as a roughly 35% share in the agricultural front-loader market.
The company's ability to navigate sales fluctuations effectively was noted, with an anticipated 11.1% adjusted EBIT margin for 2024. Berenberg predicts that, assuming cyclical headwinds subside, JOST Werke could see a compound annual growth rate (CAGR) of 3.9% from 2024 to 2026.
The firm's analysis suggests that the industry recovery will likely begin in 2025, and as a result, Berenberg is prepared to adopt a long-term perspective, looking beyond the current cycle. This forward-looking approach underpins the decision to set a Buy rating on the company's shares.
The report underscores JOST's significant role in ensuring the safety and operational reliability of vehicles in its market segments. The failure of the components supplied by JOST could lead to serious accidents or render vehicles inoperable, emphasizing the critical nature of the company's products.
Berenberg's coverage initiation reflects confidence in JOST Werke's market leadership and its potential for growth in the coming years, despite the cyclical nature of the end-markets it serves. The EUR55 price target suggests a positive outlook for the company's stock performance.
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