Switzerland's EDAG Engineering nine-month revenue falls on weak automotive sector

Overview

• Switzerland engineering services provider's revenue for first nine months fell 8.8% amid weak automotive sector demand

• Adjusted EBIT turned positive, driven by restructuring and efficiency measures

• Defence order intake nearly tripled compared to prior-year period

Outlook

• Company expects full-year revenue to decline by up to 10% from prior year

• EDAG maintains full-year adjusted EBIT margin forecast of up to 3%

• Company continues to expect investment rate of 2-3% for the year

Result Drivers

• RESTRUCTURING AND EFFICIENCY - Co said improved profitability was driven by restructuring, efficiency measures, cost base adjustments and expansion of Global Delivery locations

• DEFENCE ORDER INTAKE - Co said Defence business order intake almost tripled from prior-year period

Company press release:

Key Details

Analyst Coverage

• The current average analyst rating on the shares is "buy" and the breakdown of recommendations is 2 "strong buy" or "buy", 2 "hold" and no "sell" or "strong sell"

• The average consensus recommendation for the auto, truck & motorcycle parts peer group is "buy"

• Wall Street's median 12-month price target for Edag Engineering Group AG is €4.00, about 37.9% above its November 4 closing price of €2.90

• The stock recently traded at 11 times the next 12-month earnings vs. a P/E of 7 three months ago

Reuters Recommended Reads

• Nov 3 - Schaeffler to cut 3,460 jobs, shut five European plants as auto slump bites

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• Nov 4 - BMW takes second profit warning in stride as it ramps up cuts

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(This story was created using Reuters automation and AI based on LSEG and company data. It was checked and edited by a Reuters journalist prior to publication.)