On Thursday, Deutsche Bank adjusted its stance on Wartsila Oyj Abp (WRT1V:FH) (OTC: WRTBY), downgrading the stock from Buy to Hold. The firm has set a price target for the company's shares at €19.00. The decision comes ahead of Wartsila's second-quarter results, which are scheduled to be reported on July 19th.
The report from Deutsche Bank anticipates that Wartsila may slightly outperform expectations in terms of new orders while potentially falling short on revenue. However, the firm does expect Wartsila to surpass predictions in adjusted EBIT (earnings before interest and taxes). Deutsche Bank's estimates for the company's Marine sector are above the consensus, but its projections for the Energy sector fall below the average market expectations.
Deutsche Bank's analysts noted that industry statistics for Marine indicators continue to show positive signs. Despite this, the share's recent good performance has been taken into account, leading the analysts to believe there is limited potential for further upside to their price target of €19.00.
The downgrade to a Hold rating reflects the analysts' view that Wartsila's stock is now appropriately valued, following its strong performance. The firm's analysis indicates that while Wartsila is expected to report a solid quarter, the current share price has already accounted for this optimism.
As a result, Deutsche Bank suggests that investors maintain their positions without increasing their stake in the company at this time.
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