Carl Zeiss Earnings: Tough Results as Sales and Margin Slip but Better Second Half Awaits

Narrow-moat Carl Zeiss reported second-quarter earnings that came in slightly below our expectations. Total sales of EUR 472 million were down 6.4% year over year as inventory destocking and unfavorable foreign-exchange headwinds offset solid demand in Europe, Middle East, and Africa. After updating our full-year assumptions, we maintain our fair value estimate of EUR 82 per share, as our slightly trimmed near-term outlook was immaterial due to time value of money impact.