Shares of Swiss building supplier Arbonia fell 1.2 percent on Thursday to trade at 3.70 francs, following price target reductions by Kepler Cheuvreux and UBS. The move came after the company issued a revenue and profit warning for the 2026 financial year on Monday.
Kepler Cheuvreux analyst Martin Flückiger lowered his price target on the shares to 3.90 from 5.40 francs and downgraded the rating to "Hold" from "Buy". Flückiger noted that estimates were adjusted downward following the warning and pointed to an increased risk that the German door manufacturer could lose further market share.
Arbonia now projects revenue for the year to match the previous year at approximately 625 million francs, with earnings before interest, taxes, depreciation, and amortization (Ebitda) expected to reach around 50 million francs, according to the AWP news agency. Previously, the company anticipated revenue growth of 3 to 5 percent and an Ebitda comparable to the prior year.
The lower guidance stems primarily from a slower-than-expected normalization of revenue in the German business. The market environment weakened further since the middle of the year, with demand in new construction and renovation remaining below expectations.
Additional difficulties arose at the Garant subsidiary in Thuringia during an SAP software implementation. The software deployment disrupted supply chains and production, leading to lost revenue. Competitors stepped in to secure market share while the Swiss supplier faced a temporary loss of trust within the German specialist trade.
Since the software issues emerged, Arbonia's share price has declined by 66 percent, falling below levels recorded in 1990. Despite challenges in Germany, operations in other European markets developed solidly. For entities outside the German Garant subsidiary, the group projects an Ebitda increase of more than 15 percent year-on-year for 2026.
Analysts at Zürcher Kantonalbank (ZKB) noted that ongoing challenging market developments in Germany weighed on positive results in other regions. ZKB welcomed the focus on developing new markets and additional distribution channels to reduce reliance on Germany. With an expected price-to-earnings ratio of 13.4x, ZKB analysts maintained their "Market Weight" rating.
Meanwhile, UBS analyst Leonie Zirn maintained a "Buy" rating while lowering her price target to 5.40 from 6.20 francs, representing a potential upside of 45 percent. Zirn stated that despite significant reductions in earnings per share (EPS), the impact of the warning on the discounted cash flow valuation model remains limited due to the low earnings base.
UBS views the risk-reward profile as positive, supported by a favorable comparative base effect and high-20 percent Ebitda growth for the 2027 and 2028 financial years, while emphasizing that operational execution remains critical.
Data from Bloomberg indicates that return on equity (ROE), return on invested capital (ROIC), return on assets (ROA), and return on capital employed (ROCE) are currently negative, which may constrain a rapid share price recovery.
