Schindler shares downgraded, price target cut by BNP Paribas on market position

On Tuesday, Schindler Holding AG (SCHN:SW) (OTC: SHLAF) experienced a change in stock rating as Exane BNP Paribas (OTC:BNPQY) shifted its view on the company from Outperform to Neutral. Accompanying this downgrade, the firm also adjusted its price target for Schindler shares from CHF225.00 to CHF215.00. The revision reflects a reassessment of the company's market position and future earnings potential.

The analyst from Exane BNP Paribas noted that Schindler's shares had been re-rated higher than its peer, KONE, despite Schindler's relatively lower margin and return profile. This re-rating was attributed to the company's improved execution over recent quarters.

Still, the analyst pointed out that the market has now fully recognized and priced in Schindler's medium-term target of a 13% EBIT margin, which is approximately 200 basis points above its current levels.

The revised price target and stock rating take into account the potential challenges facing Schindler, particularly in the construction markets. The analyst expressed concerns about depressed construction markets in China and other regions, which could limit the company's ability to significantly outperform market expectations in the forthcoming year.

The report further stated that the new price target of CHF215.00 is a result of integrating expectations for a weaker financial year in 2024. The downgrade to Neutral signifies a shift to a more cautious stance on the stock's near-term growth prospects.

In conclusion, Exane BNP Paribas has adjusted its outlook for Schindler Holding AG, taking a more conservative position on the stock's anticipated performance. The firm's revised analysis incorporates current market conditions and Schindler's strategic financial targets.

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