Bayer’s Q3 2023 results were subdued as expected, with a decent recovery in volumes negated by still depressed glyphosate-based (GLY) product prices. Sales and adjusted (adj.) EBITDA missed consensus by 1% and 2%, respectively. While the confirmation of the 2023 guidance by management brought in some cheer, how the company delivers a strong Q4 is to be seen, more so after Bayer hinting at a soft growth outlook and continued challenges to profitability in 2024. On a positive note, Bayer stated that it is reviewing its structural options, including a separation of either the Consumer Health or the Crop Science business, and plans to optimise its management layers and downsize its workforce by the end of 2024; more clarity on this is expected during its Capital Markets Day in March 2024. That said, concerns around bans or restrictions on the use of GLY in many countries, uncertainties around the Roundup (GLY) litigations, and overall weak demand outlook continue to cloud Bayer’s near-term outlook. Nevertheless, from a long-term perspective, valuations are attractive to gain exposure to a global leader in crop and seed protection. Hence, AlsterResearch’s analysts reiterate their BUY rating at a lower price target of EUR 65.00 (EUR 71.00). The full update can be downloaded under https://www.research-hub.de/companies/Bayer%20AG

AUTO1 Group’s (AUTO1) Q3 2023 results were a mixed bag. Revenues missed consensus by 10%, gross profit was in line, and adjusted (adj.) EBITDA was well ahead, with the company achieving breakeven vs market expectations of a loss. The profitability numbers were particularly strong; AUTO1 reported all-time high levels of merchant and retail gross profit per unit (GPU), while controlled overheads also helped adj. EBITDA. The company is progressing well in terms of turning around its bottom line and has narrowed its adj. EBITDA loss guidance for 2023. However, in the backdrop of a still challenging demand environment in the European used car market, where overall volumes and prices are lower vs 2022 peaks, management has reiterated its revenue and gross profit guidance for 2023. Nevertheless, we believe AUTO1 has been navigating these challenges well by focusing on improving unit economics. Its efforts to open more branches to expand its purchasing network and ramp up in-house production should contribute to its efficiency and profitability goals. Based on lower top-line estimates, AlsterResearch lowers the PT to EUR 9.30 (old: EUR 10.00), but confirm to BUY. The full update can be downloaded under https://www.research-hub.de/companies/AUTO1%20GROUP%20SE

secunet Security Networks published its quarterly statement for Q3 2023, confirming the preliminary figures announced on October 27. Third quarter revenues totaled EUR 87.6m, marking a 13% yoy increase, mainly driven by positive business development in the Public Sector segment. Q3 EBIT was down by 41% yoy to EUR 5.7m, negatively impacted by higher costs related to growth investments and product mix-related effects. The mixed effects are anticipated to continue into FY24, accompanied by an increase in investments and costs for product development. After further model refinement, Alsterresearch adjusts the PT slightly to EUR 197.00 (old: EUR 200.00), which still represents an upside of 40%. The recent share price drop offers an attractive buying opportunity. Therefore, the rating remains BUY. The full update can be downloaded under https://www.research-hub.de/companies/secunet%20Security%20Networks%20AG

Fielmann's Q3 results reflect robust double-digit sales growth, supported by strategic acquisitions. Consolidated sales rose by 13.8% yoy to around EUR 526m, driven primarily by strong organic growth of around 10% in existing markets, particularly in Germany (+11.3% yoy). The company's offline dominance benefited from favorable weather conditions and increased customer frequency. The recent acquisitions of US-based SVS Vision and Eyevious Style contributed an additional 3.8PP to Q3 growth. EBITDA increased by 35.6% yoy to EUR 130m with a record high margin of 24.8%. Despite a slight slowdown in EBT growth due to higher financing costs, Fielmann maintains its outlook for FY23 of around EUR 2bn in sales and expects a disproportionate increase in EBITDA to around EUR 400m and an EBT in excess of EUR 190m. The impressive Q3 results confirm Fielmann's strong position in the lucrative optical industry. AlsterResearch’s analysts therefore reiterate to BUY with an unchanged PT of EUR 62.00. The full update can be downloaded under https://www.research-hub.de/companies/Fielmann%20AG

SUESS MicroTec signed an agreement to sell its troubled MicroOptics division to a subsidiary of Focuslight Technologies Inc. for EUR 75.5m. The price looks attractive at 3x EV/sales 23E for a loss-making business. The deal is expected to close in Q1 24, subject to pending approvals. SUESS MicroTec also reported Q3 numbers that were in line with preliminary estimates. Quarterly revenues and margins were impacted by export controls, but Advanced Backend in particular showed strong orders from AI applications. SUESS MicroTec adjusts its outlook for FY23, now excluding MicroOptics. The sale of MicroOptics results in a much more streamlined and focused portfolio, which supports AlsterResearch’s BUY recommendation with a price target of EUR 30.00. If the MicroOptics transaction closes, this could add another EUR 2 to AlsterResearch’s target price. The full update can be downloaded under https://www.research-hub.de/companies/SUESS%20MicroTec%20SE

Mister Spex reported Q3 results in line with AlsterResearch’s and the market's expectations. Against tough comps, sales grew by 2% yoy to EUR 60m. Deteriorating consumer sentiment as well as weather-related lower consumer activity were additional headwinds in Q3. In terms of profitability, adj. EBITDA was positive for the second consecutive quarter, despite product mix related gross margin compression. Nevertheless, with decent 9M results on the books, management reiterated its FY23 guidance of mid- to high-single-digit sales growth and low-single-digit EBITDA margin. Another highlight: Liquidity remains strong, well above the current market cap. AlsterResearch’s analysts reiterate their BUY rating with an unchanged PT of EUR 7.30 and see the company's high cash position as a significant margin of safety for investors. The full update can be downloaded under research-hub.de/companies/Mister%20Spex%20SE

FCR Immobilien ("FCR") has reached an important strategic milestone with the sale of the Il Pelagone hotel property in Italy. The sale is the final step towards a pure-play retail portfolio in established secondary locations in Germany. AlsterResearch’s analysts expect that the sale will have a positive impact on cash flow and should further reduce the company's overall debt and/or free up fresh funds for further expansion. The hotel property was acquired in 2018 and has now been sold to a JV of investment companies with an expected yield (IRR) of approx. 10-12% (eAR). AlsterResearch’s analysts reiterate their BUY rating with an unchanged price target of EUR 23.50. Management will provide further insights in an earnings call alongside the publication of its Q3 results. The call will take place online on November 14. and interested investors can register here: https://research-hub.de/events/registration/2023-11-14-14-00/FC9-GR The previous full update can be downloaded under https://www.research-hub.de/companies/FCR%20Immobilien%20AG

Duerr reported tepid top-line growth in Q3, with sales increasing merely by 3.6% yoy to 1.16bn (broadly in line with the consensus estimates of EUR 1.17bn). However, EBIT before extraordinary effects soared by 29.8% yoy to EUR 82.3m (beating the consensus of EUR 77.5m) mainly due to good service business and the increased execution of high-margin projects across all segments. Despite the lower orders this quarter, the company still expects a strong order book by the end of FY23. However, extraordinary expenses of EUR 35-50m for the planned capacity adjustments at HOMAG should lead to lower overall EBIT margin in FY23. While the long-term outlook remains promising, short to medium-term uncertainties weigh on the stock. AlsterResearch’s analysts therefore lower their estimates once again, resulting in a new PT of EUR 33.00 (old EUR 38.00). Nevertheless, with an upside of around 60%, AlsterResearch’s analysts reiterate their BUY recommendation. The full update can be downloaded under https://www.research-hub.de/companies/Duerr%20AG

Koenig & Bauer reported temporarily weak Q3 results due to the difficult economic environment and a smaller contribution from the Special segment. The company reported a decline in revenue across all segments, as SKB's revenue was down 6.1% yoy to EUR 294.7m in Q3 23. The EBIT decreased by 69.4% yoy and came in at EUR 3.3m in Q3 23, majorly due to higher R&D expenses, service costs and administrative expenses. Due to the new orders being slightly below the industry average for printing presses, the order intake went down 16.4% to EUR 278.4m, while the book-to-bill ratio stood at 0.9x despite the higher revenue in the reporting period. At the end of Q3 23, the order backlog was valued at EUR 890.6m, a 13.3% decline. With a temporary weak performance in Q3, management expects the 2023 financial year to be weaker than previously assumed. Therefore, it lowered its outlook for EBIT margin but reaffirmed its medium-term targets. With more conservative medium-term margin expectations, AlsterResearch’s analysts reiterate to BUY but lower their PT to EUR 20.00 from EUR 24.00. The full update can be downloaded under https://www.research-hub.de/companies/research/Koenig%20&%20Bauer%20AG

Rational delivered good Q3 ’23 results. Revenues came in 1% below consensus but EBIT beat by 8%, which is likely due to delays in operational investments. While the gross margin improved 270bps yoy in the quarter on easing input costs and impact of price hikes implemented in the past year, increase in R&D and general overheads resulted in a 1.4ppt narrower EBIT margin. The order backlog shrank to EUR 130m (-EUR 30m qoq) on good execution, even as order inflows increased yoy in Q3. With pent-up demand now almost fully met, management expects growth trends to hover around normal levels. Therefore, it has confirmed its FY23 guidance of high-single digit sales growth and a flat yoy EBIT margin. Meanwhile, a faster-than-expected recovery in China and a continued strong increase in customer interest in ESG-related issues (Rational’s superior thermal cooking technology helps to save energy, water, and cleaning chemicals, and reduce food waste) should continue to support the company’s long-term equity story. The stock appears to have already priced in these prospects. AlsterResearch’s analysts, therefore, maintain their HOLD rating, but lower their PT to EUR 630.00 (old EUR 670.00) on the basis of more cautious growth and margin expectations. The full update can be downloaded under https://www.research-hub.de/companies/research/RATIONAL%20AG