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Vaisala: Solid Q2 results incoming - Evli Research

Guidance upgraded pre-Q2 after solid quarter

Vaisala reports its Q2 results on July 23rd. Vaisala issued a guidance upgrade last week and posted preliminary figures for sales, operating results and orders received. The previous guidance range for 2021 net sales (EUR 380-400m) and operating result (EUR 35-45m) was raised to EUR 400-420m and EUR 40-50m respectively. The guidance upgrade appears to be driven largely by a solid second quarter. Preliminary figures show Group sales growth of 20% to EUR 109.5m in Q2 and operating result of EUR 10.9m (Q2/20: 7.9m). Vaisala’s preliminary orders received in Q2 grew by 25% to EUR 120.1m. Vaisala did not specify figures per segment but noted that pick-up in demand was reflected especially in the Industrial Measurements business area.

Minor estimate changes based on preliminary Q2 figures

We have only revised our estimates for 2021 based on the preliminary figures for Q2. Our estimates were already clearly in the upper end of the previous guidance and the impact as such is relatively small on full year figures. Our sales estimate is now at EUR 409.9m (prev. 396.9m) and operating result estimate at EUR 45.0m (44.6m), in the middle of the guidance ranges. Vaisala noted that the shortage of components has increased material and transportation costs, which will have a negative impact on operating result in H2/2021, and we will be following any comments on the potential magnitude of the impact in the upcoming earnings report.

HOLD with a target price of EUR 35.0 (33.0)

Based on the more favourable outlook we have adjusted our target price to EUR 35.0 (33.0). The current rather stretched valuation and potential headwind from component availability/cost limits upside potential. We retain our HOLD-rating.

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