Profit warning hits stock – but unchanged business case (Accumulate)

- We cut our FY13 EPS estimates in response to profit warning. We confirm our Accumulate recommendation.

- 1Q13 profit warning destroys clean record. We thus believe that the market will remain cautious in the short to mid term. However, we deem the reason for the cost overruns (strike related) as outside the responsibility of Andritz. Thus, there is no need to worry about Andritz’s technology or know-how.

- 1Q13 order intake on solid level, EUR 1.288mn. Schuler contributed around EUR 96mn. The Schuler integration boosted Andritz’s order book from EUR 6,615mn as of December 31, 2012, to EUR 7,844mn as of March 31, 2013. 

- We still consider Andritz interesting quality growth stock. We thus recommend using any further temporary share price weakness (around EUR 40.0) as an opportunity to build positions.