Deutsche Bank has moved KONE Corporation to a buy recommendation from a prior hold, revising its target price upward to €71 from €62, according to analyst John Kim. The stock was recorded at a closing price of €60.40.
The upgrade follows a downturn in the share price that occurred after the company released fourth-quarter results. Kim identified that pullback as a potential entry opportunity for investors.
Central to Deutsche Bank's view is KONE's performance outside China. The analyst noted that the company has posted robust growth in markets excluding China, and that the challenges tied to its Chinese operations now represent a smaller share of the overall business mix.
Deutsche Bank projects sustained structural expansion in KONE's modernization segment. Kim estimates a compound annual growth rate of 15% for modernization over multiple years, pointing to that segment as a core driver of long-term growth.
The bank also expects service revenue to pick up pace, forecasting that service growth will accelerate to 7% in 2027. This projected acceleration is framed as a rebound as KONE moves beyond the comparative effects of its prior rationalization efforts.
According to the analyst note, KONE retains competitive advantages in the modernization market because of its scale and its sales mix emphasis on partial modifications. Deutsche Bank views those attributes as supportive of the company’s positioning versus peers in the modernization space.
Summary of analyst action
- Rating upgraded from hold to buy by Deutsche Bank.
- Target price increased to €71 from €62.
- Closing share price reported at €60.40.
Outlook drivers highlighted
- Expected structural modernization growth at a 15% CAGR over several years.
- Projected acceleration of service revenue growth to 7% in 2027 as comparisons ease following rationalization.
- Growth outside China described as strong, with Chinese headwinds now a smaller portion of the business mix.
The note frames the recent share-price weakness after fourth-quarter results as creating an entry point, while emphasizing modernization and service trends as the key levers underpinning the upgraded stance.