On Friday, CFRA analysts downgraded Sika AG (SIX:SIKA:SW) (OTC: SKFOF) from Hold to Sell, adjusting the price target to CHF200 from the previous CHF270. The reduction reflects a new valuation based on a price-to-earnings (P/E) ratio of 36 times for the year 2025, which aligns with the company's historical average P/E multiple.
The analysts have revised their earnings per share (EPS) forecasts for Sika for the years 2024 and 2025 to EUR7.80 and EUR8.30, down from EUR8.00 and EUR9.00, respectively.
Sika's sales growth in 2024 was reported at 4.7% in Swiss Francs (CHF), totaling CHF11.76 billion, which translates to a 7.4% increase in local currencies (LC). Despite this growth, the pace in the final quarter of 2024 was not as robust as earlier in the year, with sales up to September growing 9.1% in LC. This performance was slightly below expectations, which had anticipated a high-single-digit sales increase.
The company experienced varied growth rates across different regions. The Europe, Middle East, and Africa (EMEA) region saw a 7.3% increase in LC sales, while the Americas experienced a stronger 11.2% LC growth. In contrast, the Asia-Pacific region reported a more modest 2.4% LC sales growth.
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