First Berlin Equity Research has published a research update on Schloss Wachenheim AG (ISIN: DE0007229007). Analyst Simon Scholes reiterated his BUY rating and decreased the price target from EUR 20.00 to EUR 19.00.

Abstract
A strong comparator quarter and still subdued consumer sentiment in both France and Germany restricted Q2 25/26 volume growth to 1.6% and sales growth to 0.8% to €155.2m (FBe: €161.0m; Q2 24/25: €154.0m). EBIT rose 1.4% to €21.9m (FBe: €23.0m; Q2 24/25: €21.6m). The Germany and France segment EBIT margins narrowed due mainly to higher non-personnel costs (packaging, freight, advertising, premises), but at 19.6% the Christmas quarter EBIT margin for SWA’s most important segment – East Central Europe – reached the highest level since 2020. The pace of economic recovery is likely to remain moderate in the near term. But wage and salary increases in France and Germany have exceeded inflation over the past two years thereby supporting consumer spending. Against this backdrop management continues to guide for a FY 25/26 sales increase of 3-6%, EBIT of €30m-€33m and net profit before non-controlling interests of €18m-€21m. Given that H1 25/26 sales rose 1.9% and that the Q3 and Q4 comparators are less challenging than Q2, we think this guidance is plausible. We have reduced our FY 25/26 and FY26/27 EBIT forecasts by 4.1% and 3.6% respectively and now see fair value for the SWA share at €19 (previously: €20). We maintain out Buy recommendation (upside: 32%).