Fresenius Medical Care (FME) released a mixed set of Q2 24 numbers with sales of EUR 4,766m (-1.2% yoy), below consensus expectations but beating the net income consensus estimate by a wide margin. Continuous portfolio optimization and FME25 savings more than offset the rising costs and resulted in an 8.3% yoy jump in adjusted operating income to EUR 433m, boosting the adj. operating margin by 80 bps yoy to 9.1%. During Q2, the company's total net debt further reduced to EUR 10,658m (Q2 23: EUR 11,714m), and the net leverage ratio further declined to 3.1x (towards the lower end of the company's self-imposed target corridor). As part of its business optimization plan, the divestitures of clinic operations in Curacao, Guatemala and Peru were closed in July 2024. Moreover, FME confirmed its FY 24 outlook and reiterated the medium-term target of achieving an operating margin between 10-14% by FY 25. However, mwb research’s analysts had assumed a faster recovery in the US and a stronger improvement in margins. As a result, the analysts are lowering their top- and bottom-line expectations leading to a new PT of EUR 36.00 (old: EUR 39.00). Remains a HOLD. The full update can be downloaded under https://www.research-hub.de/companies/Fresenius%20Medical%20Care

Knorr-Bremse has announced its preliminary Q2 results. Revenues of EUR 2.0bn were 1% ahead of consensus estimates, stable yoy and up 2% qoq. Operating EBIT reached EUR 252m, representing a margin of 12.5% and exceeding expectations by 30 basis points, reflecting the positive impact of the "BOOST 26" cost and efficiency program. A solid order intake of EUR 2.1bn and an increased order book of EUR 6.8bn underline continued growth and provide good visibility for the full year. The company raised its full-year EBIT margin guidance to 11.5%-13.0% (from 11.5%-12.5%) and maintained its revenue and free cash flow guidance. Based on the H1 results, Knorr-Bremse is likely to reach the upper end of its revenue and margin targets. mwb research’s analysts raise their estimates and arrive at a new price target of EUR 85.00 (old: EUR 80.00), confirming their BUY recommendation. The full update can be downloaded under https://www.research-hub.de/companies/Knorr%20-%20Bremse%20AG

Traton’s Q2 2024 results were broadly as expected, with revenues coming in line with consensus and adj. EBIT falling short by 1% (-2% yoy dragged by Navistar). Q2 sales decreased 1% yoy to EUR 11.6bn, as volumes fell 5% yoy to 79.0k units, despite a favourable price/product mix, due to challenging demand for MAN trucks in Germany and muted delivers at Navistar due to a fire incident at a mirror supplier’s plant. Order intake grew at a modest 4% yoy on normalising orders and the book-to-bill ratio stood at 0.75x for the quarter. Considering a broader market normalisation, management confirmed its 2024 outlook with a range of -5% to +10% yoy growth in unit sales and revenue and an adj. EBIT margin of 8.0%-9.0%. Moreover, after a few quarters of restrictive order intake, the development of its order intake over 2024-2025 will be a key monitorable. Meanwhile, Volkswagen’s (VW) plans to sell additional shares in Traton to reduce its stake from 90% to 75%+ one share in the medium term. Hence, there is a risk of a prolonged stock overhang, as VW seems to plan to successively increase the free float, at the same time it adds to liquidity in the shares. mwb research broadly retains estimates and leaves the price target of EUR 35.00 unchanged, which prompts an upgrade to BUY from HOLD. The full update can be downloaded under https://www.research-hub.de/companies/Traton%20SE

BASF’s Q2 2024 results missed consensus by 4% in terms of sales and EBITDA excluding special items (ex-SI), on still muted prices, though volumes are recovering at a slow pace. Overall sales declined 7% yoy. However, management noted that pricing pressure has somewhat eased, and BASF remains optimistic of a recovery and confirmed its guidance for 2024 – EBITDA (ex-SI) to increase to EUR 8.0-8.6bn. Management also reiterated its plans to cut down operating costs further (targets annual cost savings of EUR 2.1bn by 2026) and control its capex and working capital investments. Other strategic initiatives, including closure of glufosinate-ammonium (GA) production and formulation facilities in Knapsack and Frankfurt (which have been reeling under pressure from generic competition and alternative technologies) and the reduction of a stake in Wintershall Dea, are progressing well. mwb research maintains a BUY rating at an unchanged PT of EUR 60.00. The analysts believe BASF will continue to remain a good dividend play, given its commitment to maintaining or increasing dividend. The full update can be downloaded under https://www.research-hub.de/companies/BASF%20SE

Wacker Chemie reported mixed set of Q2 2024 results, missing consensus by 2% on sales while exceeding consensus by 2% on EBITDA line. While yoy print remained depressed (sales: -16%, EBITDA: -37%), due to substantially low solar-grade polysilicon volumes, the sequential trends were better. Revenues declined 1% qoq, while EBITDA was down 7% qoq to EUR 160m, largely due a decline in the ‘Other’ segment, while key divisions reported improvements on a gradual uptick in demand/ volumes, better utilisation levels, and easing energy and raw material costs and efficiency measures. In terms of qoq sales growth, all segments, except Polysilicon, reported increases. The overall outlook for 2024 is confirmed, with management now optimistic of reaching the upper half of its EBITDA guidance range, with an upgrade for silicones’ EBITDA margin. Q1 and Q2 results show faint signs of recovery. With broadly unchanged estimates, mwb research’s analysts reiterate their BUY recommendation with an unchanged price target of EUR 128.00. The full update can be downloaded under https://www.research-hub.de/companies/Wacker%20Chemie%20AG

thyssenkrupp nucera reported preliminary Q3 sales of EUR 236m, aligning closely with expectations (EUR 238.4 million) and reflecting strong growth of 26% year-over-year and 40% quarter-over-quarter, presumably driven by advancements in major AWE segment projects such as those in Saudi Arabia. The company's EBIT also showed a slight positive surprise at EUR 1m, surpassing the expected EUR -14m and marking a recovery after a negative Q2, likely due to profitability improvements in the CA segment and progressing AWE projects. Despite the substantial order book of EUR 1.2bn, ongoing market uncertainties have led to the withdrawal of FY25 revenue and earnings guidance. The mwb research analyst’s estimates have been adjusted to reflect slower order book conversion and subdued order activity, leading to a revised price target of EUR 13.50, down from EUR 18.00, though the BUY rating remains due to the company's strong long-term prospects. The full update can be downloaded under https://www.researchhub.de/companies/thyssenkrupp%20nucera%20AG%20&%20Co%20KGaA

Vossloh reported a good set of Q2 2024 results. Revenues decreased 15% yoy to EUR 292m, mainly due to temporary weakness in Fastening System deliveries in China and EBITDA declined on a very strong comparable base. Nevertheless, the company fared well in terms of the EBITDA (+21bps yoy), with improvements across segments. Order intake of EUR 420m in Q2 (+22% yoy) continued to impress, with the book-to-bill ratio at a high 1.44x, clearly pointing to further growth. Meanwhile, on healthy progress so far, management reiterated its guidance for 2024. The record-high order backlog of EUR 906m (75% of 2023 revenues) provides visibility through FY 2025 and indicates that Vossloh continues to be one of the beneficiaries of green mobility and associated major investment programs worldwide. Considering Vossloh’s growing order book, mwb research analysts reiterate their BUY rating with an increased PT of EUR 57.00 (old: EUR 52.00). The full update can be downloaded under https://www.research-hub.de/companies/research/Vossloh%20AG

Infineon's stock yesterday dropped sharply due to industry weakness in the automotive and industrial segments, which constitute over 60% of its sales. This decline is mirrored in the poor quarterly results of competitors like NXP and STM, and automotive giants such as Tesla, Nissan, and Ford. In contrast, Hyundai Motor, a key customer, reported record profits, alleviating some concerns about the automotive sector. Infineon has adjusted its FY24 outlook downward twice already, most likely reflecting any end market weakness. We revise our FY24 sales estimate down, now expecting a 9.5% decline yoy, and EBIT margin from 19.8% to 19.0% to reflect the ongoing industry challenges. However, we foresee a 10% CAGR mid-long-term due to Infineon's strengths in automotive, power management and IoT. Consequently, mwb research maintains a price target of EUR 40.00, representing an upside potential of 31%, and upgrade their recommendation to BUY from HOLD. The full update can be downloaded under https://www.research-hub.de/companies/Infineon%20Technologies%20AG

TAKKT reported detailed Q2 2024 results that were in line with its weak preliminary release. Burdened by persistent macroeconomic challenges and issues at its FoodService (FS) business relating to integration of the Hubert and Central brands, revenues declined 19% yoy and the adjusted EBITDA margin narrowed by 2.4ppt yoy to 6.6%. Although sales declined in all divisions, FS experienced the most significant decline (-28% yoy). Consequently, management lowered its FY 2024 guidance at the time of prelims, which now was confirmed, expecting organic revenues to decline 12%-17% and the adjusted EBITDA margin to be c. 7.3%-8.3%. Given the dull guidance for 2024, the ongoing macroeconomic headwinds, and the specific challenges in the FS division, we remain cautious on TAKKT. The analysts of mwb research maintain their PT at EUR 11.00 and confirm their HOLD rating. The full update can be downloaded under https://www.research-hub.de/companies/research/TAKKT%20AG

Koenig & Bauer AG (SKB) has reaffirmed its 2024 operating guidance, aiming for the lower end of its EUR 25-40m EBIT range and maintaining a sales forecast of EUR 1.3bn, demonstrating resilience in a challenging market. The company has a record post-drupa order backlog of around EUR 1bn, extending beyond 2024 and diversified across segments. Q2 faced exceptional non-operating costs of c. EUR 10m due to the drupa trade show, resulting in a preliminary operating EBIT of around EUR -13.5m. However, June showed signs of recovery with a positive EBIT contribution. The "Spotlight" program aims to achieve a 6% EBIT margin on EUR 1.5bn sales by 2026, with one-time costs of EUR 30-45m in 2024 for cost improvements. Koenig & Bauer expects a strong second half in sales and earnings, supported by the order backlog and Spotlight benefits. Based on this outlook, the mwb analysts confirm their BUY rating with a PT of EUR 18.00. The full update can be downloaded under https://www.research-hub.de/companies/research/Koenig%20&%20Bauer%20AG