Schneider Electric: Oddo's quarterly forecasts

(CercleFinance.com) - Oddo expects Q4 2019 organic growth to reach 2.
6% (just below the consensus range of 2.8%-3%), again with still a significant performance gap between Energy Management (+3.7%) and Industrial Automation (-1.2%).
Analysts say that China is expected to have resisted.

They add that unsurprisingly, the challenge will lie in the guidance for 2020. The group, which is generally optimistic in its communication, could provide a range of 2% to 4% (vs. consensus of 2.5%) for organic growth. Schneider targets an adjusted EBITA margin of 17% in 2021, with it expected to show progress in 2020 (70 bp-80 bp targeted p.a.). Oddo believes that this is ambitious, due to the lower volumes, lower price increases and an uncertain mix, it says.

Analysts confirm their Neutral rating on the share, pointing out that as it is trading at over 14x 2020 EBIT, it generously values the group's outlook.

In early trading on Wednesday, the Schneider share is down very slightly.


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