Schindler: Maintain Market-Perform; Q2 organic growth may come in below consensus, CMD delay weighs on sentiment

Overview

This report is Bernstein’s earnings preview for Schindler Q2'26. It notes that Schindler’s share price has fallen about 11% year to date, significantly underperforming both EDME and the European capital goods sector; the CMD postponement from June to November has weakened the catalyst for a medium-term margin upside path. Although the company expanded its CHF500m buyback by CHF200m, near-term fundamentals still face the issue of delayed recovery in organic sales growth.

Core views

The core view is that Schindler’s revenue growth remains under pressure in the short term, with downside risk versus consensus for Q2 and FY26 sales growth; China new installation business, the US service business, and the company’s selective strategy have resulted in insufficient growth momentum. Margin pressure is relatively manageable, with price/cost dynamics, maintenance and repair pricing, fuel costs, and raw material costs all providing some support, but deteriorating mix and weaker service unit growth still limit margin upside. The report maintains Market-Perform and believes the “cloud” over investor sentiment will last at least through H2 and the November 19 CMD.

Analysis framework

The report uses a combination of earnings preview, divisional LFL growth breakdown, comparison with Visible Alpha consensus, historical Q1-to-Q2 margin seasonality, price/cost factors, and DCF valuation to assess revenue, margins, earnings, and target price for Q2'26 and FY26-FY28.

Methodology notes

• Valuation methodsDCF

  discounted cash flow valuation

  Schindler’s CHF310 target price is based on the DCF method, with key assumptions including 7.2% WACC, 13.0% terminal EBIT margin, and 2.0% terminal growth rate.

• forecast_revisionconsensus_comparison

  comparison of forecast versus consensus differences

  The report compares Bernstein’s new forecasts, old forecasts, and Visible Alpha consensus, with emphasis on differences in FY26 LFL growth, adjusted EBIT margin, sales, and adjusted EBIT.

• operational_analysisLFL growth by division

  same-store growth analysis by division

  Through LFL growth contributions from new installations, service, and modernization businesses, it explains the impact of the China NI drag, US service recovery, and the path of double-digit modernization growth on overall revenue.

Asset mapping & comparison

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

• Schindler equity (SCHP.SW)

  covered_company

  Strengths

  Modernization business growth momentum is relatively strong, maintenance and repair pricing is supportive, price/cost dynamics are improving, fuel costs are better than expected, and the company’s expanded buyback provides some capital return support.

  Weaknesses

  Weak China new installation market, delayed recovery in the US service business, and the company’s selective strategy weigh on growth, while the CMD delay pushes back the medium-term margin catalyst.

  Comparison

  Schindler and Kone both trade at roughly 16.5x on an EV/NTM EBIT basis; Schindler’s year-to-date decline is smaller than Kone’s, but it still significantly underperforms EDME.

  Risks

  If the China market deteriorates further, H2 growth fails to accelerate, or the CMD cannot provide a stronger profitability path, the share price and earnings forecasts still face downside risk.

Key data

• Report date2026-06-25The date on the first page of the main text is 25 June 2026.
• RatingMarket-PerformThe report maintains Schindler at Market-Perform.
• Target priceCHF310The target price is based on DCF.
• Closing priceCHF266.40As of 2026-06-24.
• Implied upside16%Based on the CHF310 target price and CHF266.40 closing price.
• Year-to-date share price performance-10.7%The table discloses absolute performance; the main text says about -11% ytd.
• Relative performance vs EDME year to date-18.0%EDME was +7.3% over the same period.
• FY26 LFL growth forecast2.6%Previous forecast 3.3%, Visible Alpha consensus 3.3%.
• Q2'26 adjusted EBIT margin forecast13.6%+40bps quarter-on-quarter, +10bps year-on-year.
• FY26E adjusted EBIT margin13.7%10bps below the previous forecast and consensus.
• FY26 sales forecast10,911mShown as sales in the table; elsewhere in the report financial data are shown in CHF millions.
• FY26 adjusted EBIT forecast1,496mBelow consensus of 1,522m, about -1.7%.
• Enterprise valueCHF24,441mSummary data on the first page.
• Market capitalizationCHF27,946mTable data as of 2026-06-24.
• Dividend yield2.3%Table data on the first page.

Impact & implications

For investors, the report conveys a short-term cautious signal: valuation support exists, but strong catalysts are lacking. If Q2 organic sales growth improves only slightly, H2 will need to accelerate significantly to reach the top end of full-year guidance, which may continue to weigh on market sentiment. On margins, cost and pricing improvements can buffer some pressure, but the consensus FY26 13.8% adjusted EBIT margin may still be too high. The November 19 CMD will be the key event for validating the medium-term margin target and reassessing the investment narrative.

Risks

• Further deterioration in China, with deflationary pressure in the new installation and modernization markets.
• Higher macro uncertainty in 2026, including the US mid-term and New China economic plan.
• ISPs and second-tier OEMs launching modernization alternatives, creating competitive pressure.
• Q2 and FY26 sales growth coming in below consensus, making the top end of full-year guidance harder to achieve.
• Business mix changes driven by modernization and new installation recovery may weigh on margins.
• Selective strategy in the US and China service installed base leads to weaker service unit development.

What to watch

• Schindler Q2'26 earnings release on July 21, 2026.
• Whether Q2 LFL growth accelerates meaningfully from Q1’s 1.7%.
• Whether H2 can achieve the high single-digit growth pace needed to reach the top end of full-year guidance.
• Whether China new installation demand and the company’s growth gap versus the market narrow.
• The pace of recovery in US service growth.
• Whether the modernization business can sustain double-digit growth and drive service growth.
• Whether the November 19 CMD provides a higher and credible medium-term margin path.
• The net impact on margins from fuel, raw materials, post-tariff pricing pass-through, and maintenance and repair pricing.