Rational Earnings: Revenue Growth Against High Comparison Reflects Large Runway Opportunity

Narrow-moat Rational managed to grow organic revenue impressively by 2% year over year during the first quarter, which faced a comparison of 25% growth against the previous year. Asia and North America continue to offer the group a significant runway, growing 28% and 13%, respectively. We expect the introduction of new product innovations during the quarter to support growth and help expand its addressable market due to the added benefits its cooking appliances provide to professional kitchens versus traditional cooking appliances. Management kept its full-year revenue guidance in the mid- to high-single-digit percentage range as demand remains robust and comparables against the prior year become easier as the year progresses. Shares are trading at a 30% premium to our EUR 600 fair value estimate, which we maintain.