DKILY - Daikin's Reinvestment Plans Have Undermined Near-Term Growth And Sentiment
- Daikin shares have underperformed HVAC peers as the company is sacrificing near-term margins to reinvest in product R&D and expanded sales/distribution capabilities.
- The U.S. is going to be management's top focus for the next several years, with management targeting double-digit revenue growth, #1 market share, and expanded sales/service capabilities.
- Daikin is likely to spend considerable sums on M&A to bulk up its go-to-market and service capabilities.
- A lack of near-term margin leverage is a major headwind, but mid-single-digit revenue growth and eventual double-digit FCF margins can support a high single-digit annualized return.
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Daikin's Reinvestment Plans Have Undermined Near-Term Growth And Sentiment