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Wartsila Corp WRT1V

Morningstar Rating
€18.93 +0.10 (0.50%)
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Company Report

Wartsila Earnings: Sharp Uptick in Shipbuilding Activity Buoys Order Backlog to Record High

Investors welcomed wide-moat Wartsila’s stellar first-quarter results that featured a large uplift in order intake inspired by the significant uplift in global shipbuilding activity in early 2024. Wartsila shares are up 10% at the time of writing. Wartsila’s first-quarter order intake rose a substantive 17% organically—driving Wartsila’s order book to a record-high of EUR 7.3 billion—which should support elevated earnings growth in 2024 and 2025. With demand in 2024 for Wartsila’s suite of marine engines, systems, and equipment tracking significantly ahead of our prior forecast, we lift our fair value estimate by 18% to EUR 13. A swifter turnaround of Wartsila’s energy segment than we’d previously credited also contributes to our fair value estimate uplift, with the segment’s recovery in EBIT margin tracking ahead of our prior expectations. Wartsila shares screen expensively, trading at a 33% premium to our upwardly revised valuation.

Price vs Fair Value

WRT1V is trading at a 390% premium.
Price
€18.83
Fair Value
€71.00
Uncertainty
High
1-Star Price
€87.36
5-Star Price
€6.10
Economic Moat
Mkbg
Capital Allocation
Xbpxjqf

Bulls Say, Bears Say

Bulls

Wartsila’s marine aftermarket business is bouncing back after being hit hard during the coronavirus pandemic.

Bears

New shipbuilding activity has been subdued in recent times by inflated shipbuilding costs and a lack of clarity as to which zero-emission fuels will prove to be commercially viable.

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Trading Information

Previous Close Price
€18.84
Day Range
€18.8218.96
52-Week Range
€9.4219.04
Bid/Ask
€18.92 / €18.93
Market Cap
€11.15 Bil
Volume/Avg
139,156 / 887,885

Key Statistics

Price/Earnings (Normalized)
29.15
Price/Sales
1.87
Dividend Yield (Trailing)
1.54%
Dividend Yield (Forward)
1.70%
Total Yield
1.63%

Company Profile

Wartsila is a global manufacturer of critical equipment and services for the marine and energy markets with operations in over 70 countries. Approximately one half of the group’s sales are derived from the sale of services and spare parts through its network of 258 sales and service network locations. Wartsila is listed on the Nasdaq Helsinki exchange in Finland. Approximately 1 in 3 oceangoing vessels has a Wartsila solution on board, translating into an installed base of over 50,000 vessels and 10,000 customers.
Sector
Industrials
Industry
Specialty Industrial Machinery
Stock Style Box
Mid Growth
Total Number of Employees
17,909

Competitors

Valuation

Metric
WRT1V
ENR
CAT
Price/Earnings (Normalized)
29.1516.27
Price/Book Value
5.272.009.88
Price/Sales
1.870.682.70
Price/Cash Flow
21.8313.90
Price/Earnings
WRT1V
ENR
CAT

Financial Strength

Metric
WRT1V
ENR
CAT
Quick Ratio
0.750.560.73
Current Ratio
1.170.921.35
Interest Coverage
11.47−2.1026.54
Quick Ratio
WRT1V
ENR
CAT

Profitability

Metric
WRT1V
ENR
CAT
Return on Assets (Normalized)
4.35%−11.69%13.02%
Return on Equity (Normalized)
14.03%−57.03%59.16%
Return on Invested Capital (Normalized)
10.71%−37.56%19.73%
Return on Assets
WRT1V
ENR
CAT
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