First Berlin – Schloss Wachenheim AG Research Update (18/11/2020)

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

Organic volume growth in both Germany and East Central Europe provided a platform for improved profitability in both geographic segments in Q1 20/21. Better results from these two segments outweighed weaker performance in France where volume declined both domestically and on export markets. Group sales rose 2.6% to €82.1m (Q1 19/20: €80.0m; FBe: €82.5m) while EBIT jumped 58.4% to €4.5m (Q1 19/20: €2.8m; FBe: €4.3m). Based on the y-o-y improvement in the Q1 results and the assumption for December of at least partial easing of the current lockdown measures in force on the company's major markets, SWA has maintained the full-year guidance for stable volumes, sales and profits given in the annual report. Our forecasts, which are in line with company guidance, are unchanged as is our price target of €20.00. Our recommendation is to Buy the share now for post-pandemic recovery.