JGHHY - Jungheinrich: Unloved Amid Weak European Markets, But Undervalued For Recovery

2025-01-15 17:58:51 ET

Summary

• Jungheinrich shares have underperformed due to weak industrial capex and European market conditions, but major end-markets should strengthen in 2025.
• Management maintained its guidance for FY'24 with Q3 results, but the Street is expecting results on the lower end of the range; I see a risk of a miss-and-lower quarter.
• Positive long-term prospects include leveraging customer growth, reshoring trends, and investments in logistics automation, with products like Powercube driving future demand.
• Valuation suggests significant upside, with fair value estimates around EUR mid-30s, presenting a potential opportunity despite near-term uncertainties.

Timing is everything, and the past year has been a bad time to own stocks tied to industrial capex, and particularly so for those companies focusing on a European clientele. With sub-50 Purchasing Manager Index readings for over two years running and ongoing industrial production declines, customers just haven’t been looking to expand production or distribution capacity, and this has directly impacted smaller intralogistics players like Germany’s Jungheinrich ( JGHAF ) (JUN3.XE)....

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