Citi ups Kion to 'buy', sees prospect for a return to order growth

Citi upgrades German materials handling equipment manufacturer Kion KGX.DE to "buy" from "neutral", as it expects a return to sustained growth in the Supply Chains Solutions and Industrial Trucks divisions

For Supply Chains Solutions it cites the likely re-start of investment programs by eCommerce customers in 2025 after three years of order decline as a driver for future growth

The broker sees automation opportunities arising from the recent partnership with NVIDIA NVDA.O and the adoption of AI in the warehouse industry us an underestimated positive

Citi also expects the downturn in the Industrial Trucks Segment to come to an end, as backlogs are close to normal and it sees positive signals in the German market, which makes up over 20% of sales

The brokerage expects the earnings downgrade cycle to be over and raises its 2026 EBIT forecast for the co. by 9%, driven by orders acceleration and IT&S margin recovery in 2026/27E

The broker ups its TP by ~62% to EUR 60.00

Out of 21 analysts covering the company, 15 rate it "strong buy" or "buy" and six rate it "hold"