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Sulzer AG (CH:SUN)
:SUN

Sulzer AG (SUN) AI Stock Analysis

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Sulzer AG

(OTC:SUN)

Rating:77Outperform
Price Target:
CHF171.00
â–²(7.28%Upside)
Sulzer AG's strong financial performance, characterized by consistent growth and effective cash flow management, is the most significant factor driving the score. Positive technical indicators support the stock's upward trend, while the valuation suggests a balanced risk-reward profile. The absence of earnings call data and corporate events did not affect the score.
Positive Factors
Financial Performance
Sulzer just released FY24 results, in line with upgraded guidance and ahead of consensus on sales, OpEBIT, and orders.
Future Growth Potential
Higher order intake bodes well for envisaged growth momentum in FY25.
Services Performance
Services continues to thrive, supported by unbroken demand from turbine verticals with orders growing HSD (+9% YoY, +8% org) to CHF392m (+5% vs. cons.).
Negative Factors
Chemtech Orders
Orders in Chemtech are down -17% YoY to CHF230m against tough comps.
Order Performance
1Q25 orders came in softer as already envisaged, flat YoY to CHF1,020m, -3% vs. cons. and primarily driven by a larger Chemtech order shifting into 2Q as well as high uncertainty in Oil & Gas verticals in the US.

Sulzer AG (SUN) vs. iShares MSCI Switzerland ETF (EWL)

Sulzer AG Business Overview & Revenue Model

Company DescriptionSulzer AG (SUN) is a global leader in fluid engineering, specializing in the development and manufacturing of pumping solutions, services for rotating equipment, and separation, mixing, and application technologies. The company serves a diverse range of industries, including oil and gas, power, water, and general industry, providing innovative and sustainable solutions tailored to meet the specific needs of their clients.
How the Company Makes MoneySulzer AG generates revenue primarily through the sale of its highly engineered products and the provision of aftermarket services. The company's key revenue streams include the sale of pumps, agitators, and mixers, as well as the provision of maintenance and repair services for rotating equipment. Additionally, Sulzer benefits from long-term service agreements and contracts with major industrial players, ensuring a stable income stream. The company's focus on innovation and sustainability, along with strategic partnerships and acquisitions, further strengthens its market position and contributes to its earnings.

Sulzer AG Earnings Call Summary

Earnings Call Date:Apr 24, 2025
(Q4-2024)
|
% Change Since: 20.04%|
Next Earnings Date:Jul 24, 2025
Earnings Call Sentiment Positive
The earnings call conveyed a generally positive outlook with strong financial results, double-digit growth in sales and order intake, and improved profitability. However, challenges in the Chinese market and lower than anticipated free cash flow were noted as areas of concern.
Q4-2024 Updates
Positive Updates
Double-Digit Growth in Sales and Order Intake
Sulzer reported double-digit growth in both sales and order intake for 2024, with CHF 3.5 billion in sales, a significant increase from the previous year.
Strong Profitability Improvements
The company saw a strong improvement in profitability with an EBITDA of CHF 436 million, and a return on capital employed reaching 19.7% for 2024.
Significant Increase in Dividend
Sulzer proposed a substantial increase in dividend payments from CHF 3.75 per share to CHF 4.25 per share, reflecting the company's solid financial performance.
Order Intake Margin Growth
Order intake margin increased by 110 basis points in 2024, indicating a strong market position.
Strong Performance in Services and Flow Divisions
The Services division grew by 12.5% in order intake, while the Flow division saw a 14.7% increase in the Energy segment and 10.6% in the Water and Industry segment.
Negative Updates
Challenges in the Chinese Market
Chemtech's growth was slower at 5.4% due to a 20-25% market decline in China, although this was partially mitigated by expansion in the Americas and the Middle East.
Free Cash Flow Below Expectations
Free cash flow was CHF 235 million, lower than expected due to increased CapEx and higher tax payments.
High Net Working Capital
Net working capital was high due to a significant increase in backlog from CHF 1.9 billion to CHF 2.3 billion.
FX Impact on Financials
A negative FX impact of 3% affected order intake and sales, though less than the 8% impact in 2023.
Company Guidance
In the recent earnings call, Sulzer presented its 2024 financial results, showcasing a robust double-digit growth in both sales and order intake. The company achieved CHF 3.5 billion in sales, reflecting significant growth over the previous year, despite a 3% negative impact from the Swiss franc's appreciation. EBITDA improved to CHF 436 million, marking a substantial enhancement in profitability. Sulzer's return on capital employed increased by 200 basis points to 19.7%, indicating a positive trend in operational efficiency. The company's backlog rose to CHF 2.3 billion, demonstrating strong demand. In terms of regional performance, the Americas and Asia Pacific exhibited strong growth, with services in the U.S. and APAC regions showing continued expansion. Sulzer's strategic focus on essential industries such as energy, water, and chemicals, coupled with operational excellence initiatives, has positioned the company for sustained growth. The company plans to propose a dividend increase from CHF 3.75 to CHF 4.25 per share, reflecting its solid financial standing. Looking ahead to 2025, Sulzer anticipates sales growth between 5% and 8%, with an EBITDA margin projected above 15%.

Sulzer AG Financial Statement Overview

Summary
Sulzer AG demonstrates a strong financial position with a consistent revenue growth rate of 7.6% and solid profitability margins. The balance sheet shows manageable debt levels with a reasonable Debt-to-Equity Ratio of 0.95, and robust cash flow management supports growth and investment.
Income Statement
85
Very Positive
Sulzer AG has shown consistent revenue growth with a Revenue Growth Rate of 7.6% from 2023 to 2024. Its Gross Profit Margin is solid at 33.5% and Net Profit Margin at 7.4% in 2024, indicating strong profitability. The EBIT Margin of 10.8% and EBITDA Margin of 14.2% also highlight efficient operations. The company's income statement reflects a healthy growth trajectory and profitability, although there was a dip in net income in 2021 due to one-off factors.
Balance Sheet
78
Positive
The company's Debt-to-Equity Ratio is 0.95 in 2024, which is reasonable for the industry, showing balanced leverage. The Return on Equity (ROE) is strong at 21.4%, indicating efficient use of equity to generate profits. The Equity Ratio is 25.9%, suggesting a moderate reliance on equity financing. Overall, the balance sheet is stable, but the company should monitor its debt levels to maintain financial flexibility.
Cash Flow
80
Positive
Sulzer AG's Free Cash Flow increased by 4.4% from 2023 to 2024, supporting growth and investment. The Operating Cash Flow to Net Income Ratio is 1.24, indicating strong cash conversion from profits. The Free Cash Flow to Net Income Ratio is 0.88, showing a solid capacity to fund operations and growth initiatives. Cash flow management is robust, supporting business sustainability.
Breakdown
Dec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income StatementTotal Revenue
3.53B3.28B3.18B3.16B2.97B
Gross Profit
1.18B1.08B939.60M946.90M872.50M
EBIT
382.50M329.70M153.30M203.60M162.40M
EBITDA
503.00M440.00M250.10M334.80M261.20M
Net Income Common Stockholders
261.90M229.10M28.60M1.42B83.60M
Balance SheetCash, Cash Equivalents and Short-Term Investments
1.06B977.00M1.21B1.53B1.43B
Total Assets
4.71B4.37B4.70B5.08B5.43B
Total Debt
1.16B1.15B1.44B1.60B1.84B
Net Debt
101.30M174.50M248.60M93.50M719.60M
Total Liabilities
3.48B3.27B3.67B3.80B4.01B
Stockholders Equity
1.22B1.10B1.02B1.27B1.40B
Cash FlowFree Cash Flow
231.40M296.60M49.50M230.30M263.20M
Operating Cash Flow
323.80M362.20M119.30M316.40M368.70M
Investing Cash Flow
-98.20M-104.80M-87.00M414.50M-461.80M
Financing Cash Flow
-151.60M-448.60M-286.30M-365.20M236.50M

Sulzer AG Technical Analysis

Technical Analysis Sentiment
Positive
Last Price159.40
Price Trends
50DMA
144.21
Positive
100DMA
144.85
Positive
200DMA
137.01
Positive
Market Momentum
MACD
4.12
Negative
RSI
68.01
Neutral
STOCH
75.15
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For CH:SUN, the sentiment is Positive. The current price of 159.4 is above the 20-day moving average (MA) of 154.35, above the 50-day MA of 144.21, and above the 200-day MA of 137.01, indicating a bullish trend. The MACD of 4.12 indicates Negative momentum. The RSI at 68.01 is Neutral, neither overbought nor oversold. The STOCH value of 75.15 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for CH:SUN.

Sulzer 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
CHSUN
77
Outperform
CHF5.39B20.6122.45%2.50%7.58%14.41%
73
Outperform
CHF1.22B18.41
5.35%-11.92%100.79%
70
Outperform
CHF2.00B26.01
2.32%10.38%18.74%
70
Neutral
CHF4.17B18.41
2.69%-11.73%-35.55%
69
Neutral
CHF1.62B25.97
1.62%-5.25%-6.32%
66
Neutral
$4.50B12.295.40%248.66%4.13%-12.33%
CHGF
62
Neutral
CHF5.33B24.88
2.08%-3.33%-8.90%
* Industrials Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
CH:SUN
Sulzer AG
159.40
39.80
33.27%
CH:OERL
OC Oerlikon Corporation AG
3.74
-0.91
-19.57%
CH:KARN
Kardex AG
259.00
21.66
9.13%
CH:INRN
Interroll Holding AG
1,962.00
-768.00
-28.13%
CH:BUCN
Bucher Industries AG
408.00
55.22
15.65%
CH:GF
Georg Fischer AG
64.95
1.71
2.70%
Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.

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.