Nomura raises Techtronic Industries' target price to 140 yuan, expecting EBIT profit margin to reach 10% by next year

Nomura's research report indicates that Techtronic Industries (00669.HK) is expected to achieve a year-on-year revenue growth of 4.4% to USD 15.26 billion in 2025, which is 1.8% and 1.2% lower than the bank's and market expectations, respectively. The growth is primarily driven by an 8.1% increase in sales of the Milwaukee brand. Earnings are projected to grow by 6.8% year-on-year to USD 1.198 billion, which is 1.1% and 2.8% lower than the bank's and market expectations, respectively. The slowdown in earnings growth is mainly due to tariff impacts, with a 100-day revenue recognition cycle, although this is partially offset by a slight increase in EBIT margin driven by improved gross margins.

The bank expects its core brands to drive revenue growth this year, with EBIT margins expected to reach 10% next year. The bank reiterates its "Buy" rating on Techtronic, raising the target price from HKD 125 to HKD 140 to reflect potential sales growth from the technology, energy, and manufacturing sectors. Earnings per share forecasts for 2026 and 2027 have been revised down from USD 0.77 and USD 0.87 to USD 0.74 and USD 0.84, respectively, to reflect the exit from the HART business and weak performance in the floor care business