Sulzer AG (SUN) AI Stock Analysis

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Sulzer AG

(OTC:SUN)

Rating:77Outperform

Price Target:

CHF171.00

▲(13.25%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)

Market Cap

CHF5.30B

Dividend Yield2.63%

Average Volume (3M)36.60K

Price to Earnings (P/E)19.5

Beta (1Y)1.18

Revenue Growth7.58%

EPS Growth14.41%

CountryCH

Employees13,455

SectorIndustrials

Sector Strength87

IndustryIndustrial - Machinery

Share Statistics

EPS (TTM)N/A

Shares Outstanding34,262,367

10 Day Avg. Volume39,290

30 Day Avg. Volume36,604

Financial Highlights & Ratios

PEG Ratio-0.87

Price to Book (P/B)2.38

Price to Sales (P/S)0.00

P/FCF Ratio49.20

Enterprise Value/Market CapN/A

Enterprise Value/RevenueN/A

Enterprise Value/Gross ProfitN/A

Enterprise Value/EbitdaN/A

Forecast

1Y Price Target

CHF186.00

Price Target Upside23.18% Upside

Rating ConsensusModerate Buy

Number of Analyst Covering2

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: 13.72%|

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

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

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

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.

Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Breakdown
Income Statement		Total Revenue
3.53B	3.28B	3.18B	3.16B	2.97B
	Gross Profit
1.18B	1.08B	939.60M	946.90M	872.50M
	EBIT
382.50M	329.70M	153.30M	203.60M	162.40M
	EBITDA
503.00M	440.00M	250.10M	334.80M	261.20M
	Net Income Common Stockholders
261.90M	229.10M	28.60M	1.42B	83.60M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
1.06B	977.00M	1.21B	1.53B	1.43B
	Total Assets
4.71B	4.37B	4.70B	5.08B	5.43B
	Total Debt
1.16B	1.15B	1.44B	1.60B	1.84B
	Net Debt
101.30M	174.50M	248.60M	93.50M	719.60M
	Total Liabilities
3.48B	3.27B	3.67B	3.80B	4.01B
	Stockholders Equity
1.22B	1.10B	1.02B	1.27B	1.40B
Cash Flow		Free Cash Flow
231.40M	296.60M	49.50M	230.30M	263.20M
	Operating Cash Flow
323.80M	362.20M	119.30M	316.40M	368.70M
	Investing Cash Flow
-98.20M	-104.80M	-87.00M	414.50M	-461.80M
	Financing Cash Flow
-151.60M	-448.60M	-286.30M	-365.20M	236.50M

Sulzer AG Technical Analysis

Technical Analysis Sentiment

Neutral

Last Price151.00

Price Trends

50DMA

144.15

Positive

100DMA

145.74

Positive

200DMA

137.65

Positive

Market Momentum

MACD

2.82

Positive

RSI

46.41

Neutral

STOCH

33.28

Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For CH:SUN, the sentiment is Neutral. The current price of 151 is below the 20-day moving average (MA) of 155.47, above the 50-day MA of 144.15, and above the 200-day MA of 137.65, indicating a neutral trend. The MACD of 2.82 indicates Positive momentum. The RSI at 46.41 is Neutral, neither overbought nor oversold. The STOCH value of 33.28 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral 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
SUN	77 Outperform	CHF5.30B	19.52	22.45%	2.63%	7.58%	14.41%
BUCN	75 Outperform	CHF4.02B	17.67		2.80%	-11.73%	-35.55%
KARN	70 Outperform	CHF2.04B	26.56		2.29%	10.38%	18.74%
INRN	69 Neutral	CHF1.56B	24.46		1.70%	-5.25%	-6.32%
OERL	68 Neutral	CHF1.23B	18.08		5.27%	-11.92%	100.79%
Sector *	66 Neutral	$4.51B	12.22	5.40%	3.63%	4.14%	-12.01%
GF	57 Neutral	CHF5.27B	24.13		2.10%	-3.33%	-8.90%

* Industrials Sector Average

Performance Comparison

CH:SUN

Sulzer AG

151.00

36.82

32.25%

CH:OERL

OC Oerlikon Corporation AG

3.67

-0.96

-20.73%

CH:KARN

Kardex AG

263.00

32.94

14.32%

CH:INRN

Interroll Holding AG

1,848.00

-700.27

-27.48%

CH:BUCN

Bucher Industries AG

391.50

51.31

15.08%

CH:GF

Georg Fischer AG

63.00

2.05

3.36%

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.