SXYAY - Sika's Pullback Looks Like A Real Opportunity

• Sika shares have sold off significantly from their 52-week high with no real company-specific issues beyond some exposure to higher energy and input costs.
• The MBCC deal looks highly complementary and I like Sika's leverage to ongoing innovation (and adoption) of more sustainable, environmentally-friendlier building materials and processes.
• My core modeling assumptions haven't changed much, and I expect Sika's organic revenue growth rate to roughly double that of the market on ongoing share growth and mix improvement.
• Sika shares look priced for a high single-digit long-term annualized return, but the risk of further derating as the market avoids risk shouldn't be ignored.

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