Rational Raises Full-Year Guidance in Ad Hoc Trading Update; Shares Fairly Valued

Narrow-moat Rational raised its full-year guidance considerably in an ad hoc trading update, anticipating growth in full-year revenue of 20%-25%, up from 10%-15%. The increase is attributable to the easing of supply chain shortages for electronic components, which have accelerated the delivery of the group’s lengthy order book into revenue. While we anticipate tweaking our short-term estimates, we don’t expect a material change to our EUR 540 fair value estimate, as revenue projected for 2023 will instead be achieved in the current year, thanks to the easing of supply chain constraints. The shares currently appear fairly valued.