Edison Investment Research Limited: Schaltbau Holding (SLT): Initiation - DC specialist on the verge of margin recovery

London, UK, 9 April 2021

Schaltbau Holding (SLT): Initiation - DC specialist on the verge of margin recovery

Schaltbau Holding should benefit from trends towards digitalisation and interconnectivity in its core Rail segment (68% of FY20 revenues), while restoring profitability levels. The ability to leverage direct current (DC) switching expertise should provide opportunities in growth markets, such as new energy, e-mobility, the DC industry and smart grids. Schaltbau's valuation offers re-rating potential now that the company is on the verge of restoring profitability after an extensive restructuring programme.

We value Schaltbau at €40 per share, which is the average of historical multiples (€42), DCF (€40) and peer comparison (€38). Schaltbau is valued at a large discount to peers due to its lower margins. We believe that the company's focus on high-growth segments and anticipated improvements in profitability should trigger multiple expansion once the margin gap to peers declines.

Click here to view the full report or here to sign up to receive research as it is published.

All reports published by Edison are available to download free of charge from its website

www.edisongroup.com

About Edison: Edison is a leading research and investor relations consultancy, connecting listed companies to the widest pool of global investors. By focusing on the volume and quality of investors reached - across institutions, family offices, wealth managers and retail investors - Edison can create and gauge intent to purchase, even in the darkest pools of capital, and then make introductions via non-deal roadshows, events or virtual meetings.

Having been the first in-market 17 years ago, Edison now has more than 100 analysts covering every economic sector. Headquartered in London, Edison also has offices in New York, Frankfurt, Amsterdam and Tel Aviv and a presence in Athens, Johannesburg and Sydney.

Edison is authorised and regulated by the Financial Conduct Authority.

Edison is not an adviser or broker-dealer and does not provide investment advice. Edison's reports are not solicitations to buy or sell any securities.

For more information, please contact Edison:

Johan van dan Hooven +44 (0)20 3077 5700 [email protected]

Learn more at www.edisongroup.com and connect with Edison on: 

LinkedIn        https://www.linkedin.com/company/edison-group-/

Twitter           www.twitter.com/Edison_Inv_Res

YouTube       www.youtube.com/edisonitv