Rational Earnings: Reinvestment Initiatives Support Further Growth

Narrow-moat Rational delivered a 17% increase in operating profits during fiscal 2023, which was driven by the brand’s strong pricing power, more than compensating for an increase in investments into research and development and marketing to fuel future growth. Its EBIT margin expanded 140 basis points to an impressive 24.6%, which management expects to be at similar levels in fiscal 2024. Rational’s reinvestment into product development and expanding its geographic footprint will help maintain its leading market share and increase adoption of its large addressable market for multifunctional cooking appliances. Shares are trading at a 30% premium to our unchanged EUR 600 fair value estimate.