Morgan Stanley analyst Nigel van Putten maintained a Hold rating on VAT Group AG (VTTGF – Research Report) today and set a price target of CHF300.00.
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Nigel van Putten has given his Hold rating due to a combination of factors impacting VAT Group AG. One of the primary considerations is the company’s exposure to the Chinese market, which remains a significant area of concern. Although China is expected to continue contributing to VAT’s revenue, the high percentage of revenue from a few Chinese companies raises questions about sustainability. Additionally, the potential decline in revenue from non-Chinese OEMs in China could pose a headwind for VAT’s growth, particularly affecting its major US clients.
Nigel also points out that VAT Group’s optimistic FY27 sales projections, based on assumptions about the WFE market and currency exchange rates, may be challenging to achieve. While the company’s expectations for growth in adjacent markets are promising, the non-linear nature of this growth and lack of quarterly disclosures could lead to market skepticism. Furthermore, the decision to widen the EBITDA margin range introduces risks, as it reflects the cyclicality of end markets and potential FX headwinds. These factors combined suggest that VAT Group’s current valuation may already reflect these optimistic assumptions, justifying the Hold rating.
According to TipRanks, van Putten is a 4-star analyst with an average return of 9.4% and a 57.14% success rate.
In another report released today, Jefferies also maintained a Hold rating on the stock with a CHF290.00 price target.