Industrie De Nora SpA: Hold Rating Amid Strong Profitability but Weak Order Intake and Cash Flow Concerns

Analyst Constantin Hesse of Jefferies maintained a Hold rating on Industrie De Nora SpA (DNR – Research Report), retaining the price target of €6.20.

Constantin Hesse has given his Hold rating due to a combination of factors impacting Industrie De Nora SpA’s performance. The company reported a solid profit and loss statement, with both EBITDA and EBIT surpassing expectations, largely driven by increased volumes in their water technologies segment, particularly in pools. However, the order intake was notably weaker, showing a significant decline both year-over-year and quarter-over-quarter, which raises concerns about future revenue streams.
Additionally, cash flow was negatively affected by working capital, a common issue in the first quarter due to seasonal patterns, resulting in a net cash position of €27.8 million compared to €67 million in the previous fiscal year. While the company has maintained its guidance for FY25 and consensus remains aligned, the combination of slower order intake and negative free cash flow could hinder stock performance. The outlook for order intake throughout the year will be crucial in determining future stock movements, especially given the already low expectations following a recent cut in medium-term guidance.