Schindler Group target price raised to CHF 290, Hold rating maintained

Overview

This report is a company research update by Deutsche Bank on Schindler Group. The core view is that Q1 showed improvement in growth versus Q4, with modernization and service businesses performing strongly, but full-year revenue still needs to accelerate gradually, and margin expansion is expected to moderate from the high level seen in Q1. The firm maintains a Hold rating and raises the target price from CHF 280 to CHF 290.

Core views

The report believes Schindler's growth depends more on the service and modernization businesses, while new installation demand is affected by interest rates, cost inflation, supply chain disruptions, and weakness in the Chinese construction market. The company did not change its full-year guidance for low- to mid-single-digit local-currency revenue growth. Deutsche Bank expects FY26 EBIT margin expansion of about 60 basis points, which is above management's full-year guidance of about 40 basis points but below the roughly 100 basis points expansion pace in Q1. Considering valuation and operating risks together, the report views risk-reward as balanced.

Analysis framework

The analysis is based on Q1 operating performance, regional demand, business-line growth, price/cost pass-through, cost bridge, management guidance, and Deutsche Bank's forecast revisions, and derives the target price using a DCF valuation framework. The focus is on comparing orders, revenue, adjusted EBIT, margins, and market consensus expectations.

Methodology notes

• Valuation methodsDCF

  discounted cash flow valuation

  The report uses DCF analysis, with explicit forecasts through 2030 and a terminal value calculation, to support the CHF 290 target price.

• cost_of_capitalCAPM

  capital asset pricing model

  The report uses the CAPM framework to calculate WACC, assuming a WACC of 7.7%.

• terminal_valueperpetual_growth

  perpetual growth terminal value

  The DCF terminal value uses an assumed perpetual cash flow growth rate of 3.5%.

Asset mapping & comparison

Structured mapping from thesis to named assets (strengths, weaknesses, peers, risks).

• Schindler Group (SCHN.SW)

  research target

  Strengths

  The service business is expected to grow at a mid-single-digit rate, the modernization business delivered double-digit growth in Q1, Q1 margin expansion was strong, and balance sheet metrics are relatively solid.

  Weaknesses

  The new installation business is under pressure, growth needs to accelerate gradually through the year, the China market is weak, and energy, logistics, and raw material costs remain a source of pressure.

  Comparison

  Deutsche Bank's FY26 forecasts are about 1% below market consensus in orders and revenue, while adjusted EBIT is broadly in line; for FY27, orders, revenue, and adjusted EBIT are all about 2% below consensus.

  Risks

  A downturn in the construction cycle, rising interest rates, cost inflation, lagged price pass-through, weak China demand, and supply chain disruptions could pressure results.

Key data

• Report date2026-04-24The report body discloses the publication date as 24 April 2026.
• RatingHoldThe report maintains a Hold rating, indicating that buying or selling is not recommended over a 12-month horizon.
• Target priceCHF 290.00The target price was raised from CHF 280 to CHF 290, an increase of about 3.6%.
• Current priceCHF 258.00Price as of April 22, 2026.
• Q1 reported EBIT margin expansion约100bpsStronger than management's full-year guidance of about 40bps, but full-year expansion is expected to moderate.
• FY26 expected revenue约CHF 11.0bnDeutsche Bank forecasts about 3% year-over-year local-currency growth.
• FY26 expected adjusted EBIT约CHF 1.5bnEquivalent to an adjusted EBIT margin of about 13.9%.
• FY27 expected revenueCHF 11.3bnExpected local-currency year-over-year growth of about 3%.
• FY27 expected adjusted EBITCHF 1.6bnEquivalent to a margin of about 14.1%.
• Modernization revenue growth+15% YoYQ1 modernization revenue grew 15% year over year, with double-digit growth across all regions.
• China new installation orders-5% YoYQ1 China new installation orders fell 5% year over year, while key leading indicators declined by more than 10% year over year.
• WACC7.7%Cost of capital assumption in the DCF valuation.
• Perpetual cash flow growth rate3.5%DCF terminal value assumption.

Impact & implications

For investors, the report conveys a mild rather than strongly bullish signal. Schindler has resilience in its service and modernization businesses, as well as the ability to raise prices and pass through costs, but the new installation market, lagged cost pass-through, and weak China demand limit continued rapid margin expansion. The higher target price reflects modest improvements in forecasts and valuation, but the Hold rating indicates that the current share price already fairly fully reflects the improvement expectations.

Risks

• Exposure to cyclical construction markets could weigh on new installation orders and revenue.
• The China market remains under pressure, with key leading indicators down more than 10% year over year in Q1.
• Rising costs for energy, fuel, logistics, copper, aluminum, and tariffs could erode margins.
• Long-cycle orders create a timing mismatch between pricing actions and income statement realization.
• If operational improvement falls short of expectations, margin expansion could be below forecasts.
• Foreign exchange could still create headwinds for revenue and earnings.

What to watch

• Whether full-year revenue can accelerate gradually from the Q1 level and meet guidance for low- to mid-single-digit local-currency growth.
• Whether modernization orders and revenue can sustain double-digit growth.
• Whether the service business can continue to deliver mid-single-digit growth.
• Whether China new installation orders and construction leading indicators can stabilize.
• The actual impact of energy, logistics, raw material, and tariff costs on FY26 margins.
• Whether price increases and surcharges can offset cost pressure in a timely manner.
• Whether FY26 adjusted EBIT margin can approach 13.9%, and whether full-year margin expansion reaches about 60bps.