UniCredit Bank Downgrades Vossloh from HOLD to SELL on Profit Warning

October 01 00:00 2011

LONDON, October 1 (RainbowNewsLine.com) – Analyst Christian Weiz of UniCredit Bank has downgraded Vossloh shares (VOS.GR) from HOLD to SELL, while reducing his estimates for the company. The target price has been reduced from €89 to €72.

In a research note published yesterday, analyst Christian Weiz mentions that Vossloh has reduced its revenue and EBIT guidance for the second time warranting a downgrade. The company reduced its topline guidance by 4% from €1.25 billion to €1.2 billion, while reducing its EBIT guidance by from €120-€130 million to €90-€100 million.

The profit warning is due to further delays in Chinese fastening systems call offs and a significant slowdown of fastening systems demand associated with the maintenance and repair of Scandinavian and Southern European Railway networks. The pricing pressure and declining capacity utilization have a negative impact on Vossloh’s margins, the analyst says. The Chinese government is reducing its investments in railway infrastructure and railway equipment, the analyst adds. UniCredit Bank has reduced its EPS estimates for 2011 and 2012 to €3.73 and €5.22, respectively.

Investment Highlights

Second profit warning in a row
Situation probably not improving short-term
Downgrade from Hold to Sell

Stock Triggers

3Q11 results on 27 October
News about call-offs in China
Stake and ambitions of Mr. Thiele