On Thursday, Schindler Holding AG (SCHN:SW) (OTC: SHLAF) received a reiterated Buy rating from Jefferies, with the firm maintaining its CHF240.00 price target on the stock. The company reported an order growth in local currencies (LC) of 5.5%, which was 4 percentage points faster than expected, leading to an approximate 2% beat on orders.
However, performance in China showed a decline, with orders down by 20% in LC and new installations (NI) falling by 30%.
Despite the downturn in China, this was balanced by a significant increase in modernization orders, which surged by 20%. Revenue for Schindler was slightly below expectations, coming in 2% lower, while adjusted earnings before interest and taxes (EBIT), excluding asset disposals, was approximately 1.5 percentage points below forecasts.
Schindler has updated its modernization outlook in North America, now expecting growth between 5-10%, an increase from the previously forecasted range of 0-5%. The company's full-year guidance remains unchanged, although this implies an estimated 5% reduction to Q4 adjusted EBIT.
In addition to these financial updates, Schindler announced a CHF500 million buyback program, signaling confidence in the company's financial position and prospects. This move is set to provide value to shareholders and reflects the company's commitment to returning capital to investors.
InvestingPro Insights
Complementing Schindler Holding AG's (SCHN:SW) recent financial performance and Jefferies' reiterated Buy rating, InvestingPro data reveals some intriguing insights about the company's financial health and market position.
According to InvestingPro Tips, Schindler holds more cash than debt on its balance sheet, indicating a strong financial position. This aligns well with the company's announcement of a CHF500 million buyback program, demonstrating its ability to return value to shareholders while maintaining financial stability.
Additionally, InvestingPro data shows that Schindler has maintained dividend payments for 18 consecutive years, further underlining its commitment to shareholder returns. This consistent dividend history, coupled with the newly announced buyback program, paints a picture of a company focused on creating long-term value for its investors.
It's worth noting that Schindler is currently trading near its 52-week high, which could be seen as a reflection of investor confidence in the company's performance and future prospects. This aligns with the positive order growth reported in local currencies and the improved modernisation outlook in North America.
For investors seeking a more comprehensive analysis, InvestingPro offers 7 additional tips for Schindler Holding AG, providing a deeper understanding of the company's financial landscape and market position.
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