Positive Outlook for KWS SAAT: Strong EBIT Margin and Improved Cash Flow Support Buy Rating

Analyst Andreas Heine of Stifel Nicolaus maintained a Buy rating on KWS SAAT (0F1N – Research Report), with a price target of €70.00.

Andreas Heine’s rating is based on a combination of factors that suggest a positive outlook for KWS SAAT despite some challenges. The company is expected to maintain a strong EBIT margin of 40% for FY-24/25, supported by rising trait income, which should help mitigate the impact of declining sugar beet and corn acreage. Additionally, the sugar price future curve indicates a favorable market sentiment, potentially leading to higher earnings in the future.
Furthermore, while the European corn market faces a competitive environment, improvements in the US JV AgReliant are anticipated to offset the decline in Europe. The company’s financial results are also expected to benefit from reduced debt and financial expenses, improving the overall financial outlook. With a stable net working capital and reduced capital expenditures, the free cash flow is projected to improve significantly, allowing for a potential increase in dividends. These factors collectively underpin the Buy rating given by Andreas Heine.

According to TipRanks, Heine is a 2-star analyst with an average return of -1.0% and a 41.11% success rate. Heine covers the Basic Materials sector, focusing on stocks such as Wacker Chemie AG, EMS-CHEMIE HOLDING AG, and Clariant AG.