We Remain Skeptical on Kion's Margin Prospects Without a Clearer Path for Repair

Following Kion's full-year 2022 results, we are maintaining our narrow moat rating and fair value estimate of EUR 50. Our valuation includes rolling our model forward, incorporating the time value of money, but offset by lower-margin forecasts. We believe Kion's competitive positioning remains intact, but that it faces cyclical headwinds and continued weak margins in the near term. We accept that cyclical factors and supply chain issues are at play, but we also think margin management remains a weak spot for the company. We previously reduced our long-term margin forecast due to concerns over cost management. We have, once again, lowered our margin forecasts and are below management's adjusted EBIT margin target of at least 10% in 2027.