Hold Rating for Draegerwerk AG & Co. KGaA Amid Mixed Performance and Competitive Challenges

Analyst Henrik Paganetty from Jefferies maintained a Hold rating on Draegerwerk AG & Co. KGaA (0K5E – Research Report) and increased the price target to €67.00 from €47.00.

Henrik Paganetty has given his Hold rating due to a combination of factors impacting Draegerwerk AG & Co. KGaA. Despite a robust order intake in the first quarter and a favorable product mix that supports short-term performance, there are concerns about the company’s mid-term outlook. The first quarter sales were weaker than expected, and the initial baseline for 2024 was overestimated, leading to a slight reduction in sales projections by 2%.
However, the company has shown improvements in its EBIT margin, prompting an increase in EBIT estimates by 5-7%. This improvement is attributed to a better product mix, including defense, enhanced pricing strategies, and a stronger focus on cost management. Although the price target has been raised to €67, the company still faces significant competition from larger rivals, which poses challenges to its future growth prospects.