Rational AG

RAA: XETR (DEU)

Morningstar Rating for Stocks	Fair Value	Economic Moat	Capital Allocation
	€738.00	Pjkxkl	Xxwldfrxdh

Rational: Profit Growth and Margin Expansion Beat Our Estimates

Matthew Donen

Jan 11, 2024

Narrow-moat Rational delivered stronger-than-expected full-year results. Revenue growth of 10% beat management’s full-year guidance of high-single-digit growth. Price increases combined with lower operating costs underpinned 17% operating growth, translating into a 24.5% EBIT margin, significantly above management's initial margin guidance of around 23%. We believe margin levels achieved in fiscal 2023 are sustainable given Rational’s strong pricing power, which is due to its brand reputation and the cost-savings of its products for professional kitchens. Shares appear richly valued relative to our unchanged EUR 570 fair value estimate.

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