Wartsila Corp

WRT1V: XHEL (FIN)

Morningstar Rating for Stocks	Fair Value	Economic Moat	Capital Allocation
	€41.60	Vfgx	Qjlvdgqz

Wartsila Earnings: Order Intake and Profitability Beat Estimates, but Long-Term Target Still Unlikely

Matthew Donen

Jul 21, 2023

Narrow-moat Wartsila delivered an impressive quarter, reporting organic order intake growth of 21%, comfortably ahead of company-compiled consensus. Service revenue grew 16% during the quarter, which led to a favourable sales mix, and combined with improving profitability within the fast-growing energy storage business, supported EBITA margin expansion of 130 basis points to 7.4%. While we commend Wartsila's improvement in profitability, it is still some way from its 12% operating margin target and our 9% medium-term margin expectation. We reiterate our EUR 9.20 fair value estimate and view shares as fairly valued.

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