First Berlin confirms its purchase recommendation on Schloss Wachenheim

Research firm First Berlin Equity Research has issued an update on Schloss Wachenheim AG (ISIN: DE0007229007), reiterating its Buy recommendation with a price target of €22.00. Despite a difficult business environment, marked by decreasing inflation and wage increases partially compensating for the loss of consumer purchasing power, SWA faced a 6.1% decline in its sales volume to 73.7 million of bottles in the second quarter 23/24. This is due to price increases necessitated by rising raw material and energy costs.

Although SWA's sales performance, with growth of 4.3% to 148.1 million euros, was lower than expected, earnings before interest and taxes (EBIT) came in at 16.4 million euros for the same quarter. These results take into account certain exceptional costs. For FY23/24, SWA now forecasts an adjusted sales growth rate of 5%, with EBIT and net profit guidance remaining at the lower end of forecast ranges.

First Berlin remains optimistic, anticipating a decline in inflation contributing to an improvement in consumer sentiment in the coming months, and therefore maintains its Buy recommendation and price target at €22.00 for Schloss Wachenheim AG.