Sika AG (SIKA) AI Stock Analysis

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Sika AG

(SIKA)

Rating:77Outperform

Price Target:

CHF247.00

▲(18.18%Upside)

Sika AG's overall stock score of 77 reflects its strong financial performance and positive earnings call insights, which highlight record growth and strategic achievements. These strengths are partially offset by a neutral technical analysis and high valuation concerns. The company's focus on sustainability and operational efficiencies further support its robust standing, although challenges such as foreign exchange impacts and difficulties in the Chinese market present potential risks.

Positive Factors

Cross-Selling

Cross-selling benefits from MBCC are materializing, with products from both companies being integrated effectively in projects.

Product Offering

Sika's superior product functionality is often preferred by customers, even if it comes at a premium price.

Negative Factors

Market Performance

The group's construction markets outperformed its industrial/automotive markets with +1.3% growth vs a decline of -1.0%.

Valuation Concerns

The valuation is high, but a recovery of underlying market volumes should drive earnings and hence the share price.

Sika AG (SIKA) vs. iShares MSCI Switzerland ETF (EWL)

Market Cap

CHF33.54B

Dividend Yield1.72%

Average Volume (3M)304.52K

Price to Earnings (P/E)26.9

Beta (1Y)1.26

Revenue Growth4.67%

EPS GrowthN/A

CountryCH

Employees33,511

SectorIndustrials

Sector Strength87

IndustryChemicals - Specialty

Share Statistics

EPS (TTM)4.17

Shares Outstanding160,479,300

10 Day Avg. Volume241,914

30 Day Avg. Volume304,522

Financial Highlights & Ratios

PEG Ratio3.07

Price to Book (P/B)6.85

Price to Sales (P/S)0.00

P/FCF Ratio40.82

Enterprise Value/Market CapN/A

Enterprise Value/RevenueN/A

Enterprise Value/Gross ProfitN/A

Enterprise Value/EbitdaN/A

Forecast

1Y Price Target

CHF242.63

Price Target Upside16.09% Upside

Rating ConsensusModerate Buy

Number of Analyst Covering9

Sika AG Business Overview & Revenue Model

Company DescriptionSika AG, a specialty chemicals company, develops, produces, and sells systems and products for bonding, sealing, damping, reinforcing, and protecting in the building sector and automotive industry worldwide. It offers tile adhesives and grouts, and systems for under-tile waterproofing and sound reduction, as well as renders and decorative finishes for exterior and interior walls; and develops and markets various admixtures and additives for use in concrete, cement, and mortar production, as well as flat roofing systems. The company also provides a range of technologies used for below and aboveground waterproofing, including flexible membrane systems, liquid applied membranes, joint waterproofing systems, waterproofing mortars and mortar admixtures, and injection resins and grouts for use in various markets, such as commercial and residential basements, tunnels, bridges, and various types of water-retaining structures, such as reservoirs, storage basins, and storage tanks. Further, it offers flooring solutions, such as synthetic resin and cementitious systems for industrial and commercial buildings; and sealants, tapes, spray foams, and elastic adhesives for the building envelope, interior finishing, and infrastructure construction applications. In addition, the company provides repair, strengthening, and protective solutions for concrete structures, such as repair mortars, shrinking grouts, anchoring adhesives, protective coatings, and corrosion control and structural strengthening systems. It serves automobile and commercial vehicle assembly, automotive aftermarket, marine vessel, industrial lamination, renewable energy, and facade engineering industries. The company was founded in 1910 and is headquartered in Baar, Switzerland.

How the Company Makes MoneySika AG generates revenue through the sale of its diverse range of construction and industrial products. The company divides its operations into several business units, each focusing on specific product categories such as concrete, waterproofing, roofing, flooring, sealing and bonding, refurbishment, and industry. These products are primarily sold to construction companies, industrial manufacturers, and distributors worldwide. A significant portion of Sika's revenue comes from the construction industry, where its products are used in various applications including residential, commercial, and infrastructure projects. Additionally, Sika maintains strategic partnerships and collaborations to enhance its product offerings and expand its market reach. The company also invests in research and development to innovate and maintain a competitive edge, ensuring continued demand for its high-performance solutions.

Sika AG Earnings Call Summary

Earnings Call Date:Feb 22, 2025

(Q4-2024)

% Change Since: -14.37%|

Next Earnings Date:Jul 29, 2025

Earnings Call Sentiment Positive

The earnings call highlighted strong financial performance with record-breaking revenue, profit growth, and successful integration of MBCC synergies. There was significant focus on sustainability and employee engagement. However, challenges in China and foreign exchange impacts were noted as areas of concern.

Q4-2024 Updates

Positive Updates

Record-Breaking Revenue and Growth

Sika achieved net sales of CHF 11.76 billion in 2024, marking a new record with 7.4% growth in local currency and 4.7% growth in Swiss francs.

EBITDA Margin Improvement

The company reported a record EBITDA of CHF 2.27 billion or 19.3% of net sales, representing an over-proportional growth of 11%.

Net Profit Increase

Net profit increased by 17.4% to CHF 1.25 billion, or 10.6% of net sales.

Employee Engagement

Sika reported a high employee engagement score of 86%, indicating strong workforce dedication.

Dividend Growth

The Board of Directors proposes a 9.1% dividend increase to CHF 3.60, up from CHF 3.30.

MBCC Acquisition Synergies

Achieved CHF 125 million in synergies from the MBCC acquisition, exceeding initial guidance.

Infrastructure and Data Center Growth

Significant projects include the longest cable bridge in North America and data center expansions, with Sika involved in over 50% of data center projects.

Sustainability Achievements

Reported a 36% reduction in accidents per 1000 employees, 10% reduction in CO2 emissions, and 7% reduction in water discharge.

Negative Updates

Challenges in China

The construction market in China remained difficult due to low consumer confidence and deflationary pressures in the residential sector.

Impact of Foreign Exchange

Foreign exchange impacts contributed a negative 2.7% to the top line, equating to a reduction of CHF 311 million.

Higher Interest Expenses

Interest expenses increased by CHF 24.5 million, primarily due to additional MBCC-related financing.

Company Guidance

In the recent call, Sika highlighted its financial performance and strategic outlook for the upcoming year. The company reported a robust 7.4% growth in local currency sales, achieving a new record of CHF 11.76 billion in 2024. The EBITDA margin reached an all-time high of 19.3%, with a net profit increase of 17.4% compared to the previous year. Earnings per share rose by 49%, and the dividend experienced a 200% growth over the last decade. Regional sales growth was notable, with the Americas achieving 11% and EMEA crossing the CHF 5 billion mark for the first time. The company aims for a 3% to 6% local currency sales growth in 2025 and plans to improve the EBITDA margin to between 19.5% and 19.8%. Sika's strategic focus includes increasing market share, enhancing operational efficiencies, and leveraging synergies from the MBCC acquisition, expecting CHF 35 million in additional synergies in 2025. The company also highlighted its commitment to sustainability, reporting a 36% reduction in accident rates and significant reductions in waste and CO2 emissions.

Sika AG Financial Statement Overview

Summary

Sika AG demonstrates robust financial health across all verticals, with strong growth and profitability in the income statement, a balanced financial structure in the balance sheet, and efficient cash flow management. Solid operational efficiency and consistent profit growth contribute to the high financial performance score.

Income Statement

Very Positive

Sika AG has demonstrated strong revenue growth, with a 4.67% increase from 2023 to 2024. The company maintains healthy margins with a gross profit margin of 54.54% and a net profit margin of 10.59% in 2024. The EBIT margin is strong at 14.57%, and EBITDA margin stands at 19.60%, indicating solid operational efficiency. Consistent profit growth and stable margins contribute to the high score.

Balance Sheet

Positive

The company exhibits a moderate debt-to-equity ratio of 0.81, showing balanced leverage. The return on equity is robust at 17.71%, reflecting effective use of equity to generate profits. Equity ratio is reasonable at 44.02%, suggesting a healthy balance between liabilities and equity. The balance sheet shows financial stability with manageable debt levels and strong equity performance.

Cash Flow

Positive

Sika AG's cash flow performance is strong, with a free cash flow growth rate of 1.34% from 2023 to 2024. The operating cash flow to net income ratio is 1.40, indicating efficient cash generation relative to earnings. The free cash flow to net income ratio is 1.11, demonstrating adequate free cash flow relative to profit. The cash flow statement reflects solid financial health with good cash management.

Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Breakdown
Income Statement		Total Revenue
11.76B	11.24B	10.49B	9.25B	7.88B
	Gross Profit
6.42B	3.53B	3.08B	2.79B	2.42B
	EBIT
1.71B	1.55B	1.57B	1.39B	1.13B
	EBITDA
2.30B	2.08B	2.00B	1.79B	1.55B
	Net Income Common Stockholders
1.25B	1.06B	1.16B	1.05B	824.50M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
712.90M	648.20M	1.88B	1.18B	1.32B
	Total Assets
15.98B	15.05B	11.48B	10.90B	9.94B
	Total Debt
5.72B	5.84B	3.89B	3.66B	4.14B
	Net Debt
5.02B	5.19B	2.02B	2.49B	2.83B
	Total Liabilities
8.93B	9.12B	6.52B	6.50B	6.65B
	Stockholders Equity
7.03B	5.92B	4.97B	4.39B	3.29B
Cash Flow		Free Cash Flow
1.38B	1.37B	833.80M	893.50M	1.24B
	Operating Cash Flow
1.74B	1.65B	1.10B	1.06B	1.37B
	Investing Cash Flow
-580.70M	-3.52B	-175.40M	-469.40M	-332.00M
	Financing Cash Flow
-1.08B	694.90M	-183.60M	-736.60M	-690.10M

Sika AG Technical Analysis

Technical Analysis Sentiment

Negative

Last Price209.00

Price Trends

50DMA

209.28

Negative

100DMA

218.51

Negative

200DMA

229.29

Negative

Market Momentum

MACD

1.08

Positive

RSI

38.75

Neutral

STOCH

26.85

Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For CH:SIKA, the sentiment is Negative. The current price of 209 is below the 20-day moving average (MA) of 219.32, below the 50-day MA of 209.28, and below the 200-day MA of 229.29, indicating a bearish trend. The MACD of 1.08 indicates Positive momentum. The RSI at 38.75 is Neutral, neither overbought nor oversold. The STOCH value of 26.85 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for CH:SIKA.

Sika AG Peers Comparison

Overall Rating

UnderperformOutperform

Sector (66)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
SIKA	77 Outperform	CHF33.54B	26.92		1.72%	4.67%	―
BUCN	75 Outperform	CHF4.00B	17.67		2.81%	-11.73%	-35.55%
Sector *	66 Neutral	$4.47B	12.22	5.40%	3.65%	4.14%	-12.00%
GF	57 Neutral	CHF5.17B	24.13		2.14%	-3.33%	-8.90%
CLZNF		$3.43B	12.37	11.11%	4.92%	―	―
EMSHF		$17.16B	33.08	25.54%	2.50%	―	―
SULZF		$6.28B	21.27	22.45%	2.75%	―	―

* Industrials Sector Average

Performance Comparison

CH:SIKA

Sika AG

209.00

-41.07

-16.42%

CH:BUCN

Bucher Industries AG

391.50

48.89

14.27%

CH:GF

Georg Fischer AG

63.00

1.86

3.04%

CLZNF

Clariant AG

10.42

-4.06

-28.04%

EMSHF

EMS-CHEMIE HOLDING AG

740.03

-80.77

-9.84%

SULZF

Sulzer AG

186.82

57.38

44.33%

Glossary

BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.