Kone Earnings: Third-Quarter Order Intake Resilient Despite Difficult Equipment Market Conditions

Our estimates for Kone remain largely unchanged following delivery of its third-quarter result, which tracked our full-year expectations. Third-quarter sales growth decelerated meaningfully to negative 1.4% year on year, which was unsurprising given the weak new-equipment orders in early 2023, particularly in China and the Americas. However, third-quarter new order intake rose 0.3% year on year on a constant currency basis, breaking with the year-to-date declining trend in new equipment orders. Investors sent Kone shares higher—up around 4% at the time of writing—with the approximately flat new-order intake offering investors hope that the worst of the cyclical weakness in new equipment markets may have already come to pass. Kone shares screen attractively, trading at a 18% discount to our unchanged EUR 48 fair value estimate.