Narrow-Moat SGS Muddles Through a Testing First Half

Narrow-moat SGS released solid first-half results, with organic revenue growth of close to 6%. Operating margins dipped slightly year over year as a result of lockdowns in China, but tight financial controls in other areas, and a lower tax rate, allowed the company to deliver bottom-line growth year over year. With guidance for the full year broadly in line with our expectations, we don’t expect to make any material changes to our forecasts, nor to our CHF 2,230 fair value estimate. We view the shares as fairly valued at these levels.