Shares in Stadler Rail have experienced a significant surge following the company's announcement of a robust order intake and increased free cash flow for the first half of the year.
At 0947 GMT, shares were up by an impressive 5.8%, reaching CHF34.66.
The Switzerland-based rail manufacturer recently revealed a free cash flow of CHF303.4 million for the first half, a substantial improvement compared to CHF91.3 million recorded during the same period last year. This positive development can be attributed to a significant reduction in net working capital, a fact highlighted by Stifel analyst Marc Zeck in a recent research note.
The remarkable improvement in cash flow and the reestablishment of a negative net working capital position following positive figures from 2019 to 2021 should be noted as significant accomplishments deserving of the market's attention, according to Stifel.
Stadler Rail successfully achieved a solid order intake totaling CHF4.66 billion during the first half of the year, which was identified by Citi analysts as the main driver behind the enhanced working capital.
"Despite having minimal impact on 2023 revenues and profits, the market is likely to respond positively to the strong order intake, particularly considering the shares' recent underperformance," stated Citi.
In summary, Stadler Rail's exceptional performance during the first half has generated notable market interest and is expected to have a favorable impact on the company's standing moving forward.