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 22.00 to EUR 21.00.

Abstract
SWA’s post-Christmas quarter is usually the weakest period of its financial year, in which EBIT is typically close to the breakeven level. Q3 24/25 sales fell 0.7% to €86.5m (FBe: €91.8m; Q3 23/24: €87.1m), while EBIT came in at €-2.4m (FBe: €1.2m; Q3 23/24: €-2.2m). Sales in Germany and France climbed by 4.9% and 3.2% respectively, but sales in East Central Europe fell 9.6%. We surmise that the sales dip in East Central Europe was caused by weaker consumer sentiment, influenced by economic and geopolitical uncertainties. Management was previously guiding towards 2024/25 sales growth of ca. 5% and EBIT of €31m-€33m but is now looking for sales to increase by ca. 4% and EBIT to come at the lower end of the €31-€33m range. 2024/25 sales growth of ca. 4% implies growth of ca. 12% for Q4 24/25, so management is clearly expecting a strong rebound in the current quarter. The recent development of the East Central Europe segment notwithstanding, we continue to expect falling inflation and interest rates to positively influence SWA’s business in the longer term. We maintain our Buy recommendation, but have reduced the price target from €22 to €21 to reflect reductions in our earnings forecasts in the light of the weak Q3 24/25 results.