Kepler Cheuvreux in a note published Monday lowered its recommendation on Interpump Group (BIT:ITPG) to "hold" from "buy" and trimmed the stock's target price to €45 from €52. The change follows management's guidance for fiscal 2026, which the broker characterized as pointing to a year of essentially flat growth for the Italian capital goods manufacturer.
Following Interpump's results announcement, Kepler Cheuvreux reduced its earnings per share estimate for fiscal 2026 by 9.9% and cut its EBITDA projection for the year by 6.7% to €475 million, down from €509 million previously.
The newly established €45 target equates to a 2026 price-to-earnings multiple of 21 times, higher than the current multiple of 19 times. Kepler Cheuvreux analyst Matteo Bonizzoni described that multiple as "more than adequate given that 2026, as said, is going to be substantially ex-growth."
Interpump reported fiscal 2025 EBITDA of €462 million, missing Kepler Cheuvreux's estimate of €471 million and the consensus forecast of €470 million. The company's 2025 EBITDA margin was 22.3%, which sits inside Interpump's guidance range of 22.0% to 22.5% but fell short of Kepler Cheuvreux's 22.7% projection by 40 basis points and missed consensus of 22.6% by 30 basis points.
The earnings shortfall was driven primarily by fourth-quarter performance. Overall fourth-quarter EBITDA missed estimates by 8.4%, with the hydraulics division responsible for almost the entire deficit. Hydraulics EBITDA landed 13.2% below Kepler Cheuvreux's expectations, while the water jetting business underperformed by 1.4% relative to the broker's forecast.
In the fourth quarter, the hydraulics division reported an EBITDA margin of 16.7%, which was 220 basis points lower than the estimated 18.9% and 390 basis points below the nine-month 2025 margin. Management attributed the weak hydraulics showing in the quarter to production inefficiencies but did not point to any specific one-off items, according to Kepler Cheuvreux's note.
This explanation marked a contrast with the fourth quarter of 2024, when management had linked poor results to an inventory write-down with an impact of about €8 million.
Kepler Cheuvreux said Interpump's 2026 guidance was more disappointing than the 2025 reported results. For fiscal 2026, management is forecasting organic growth in a range from negative 2% to positive 3%. That is materially below Kepler Cheuvreux's prior projection of 5.8% and the consensus view of roughly 5%.
Bonizzoni highlighted that the guidance shortfall is driven by Water Jetting, which management expects to decline. He noted that management anticipates a continued recovery in hydraulics but expects water jetting to remain weak, particularly in the first half of 2026 due to challenging year-over-year comparisons. The report describes water jetting as a late-cyclical segment.
Looking at fourth-quarter organic growth, Interpump reported 1.7%, a slowdown from 2.3% in the third quarter and below Kepler Cheuvreux's estimate of 3.8%. By division, hydraulics posted 4.8% organic growth in the quarter, up from 3.4% in the prior quarter, while water jetting declined 1.8%, a deterioration from 0.2% growth in the third quarter.
On the balance sheet and cash flow front, net financial debt excluding put options was €291 million, effectively in line with Kepler Cheuvreux's €290 million estimate. Free cash flow for fiscal 2025 amounted to €220 million, slightly under the broker's €226 million forecast and representing 4.9% of market capitalization.
Kepler Cheuvreux reported Interpump's market capitalization at €4.5 billion as of Feb. 13, with shares trading at €41.50 in that note. The stock has fallen 11.3% year-to-date at the time of the report.
Management also outlined ambitions for 2028, including sales of €2.5 billion and an EBITDA margin of 22.5% that would reflect some dilutive effect from mergers and acquisitions. Kepler Cheuvreux's modeling under the current perimeter assumed €2.3 billion in sales for 2028 and a slightly higher EBITDA margin of 23.3%.
Regarding net cash objectives, Interpump is targeting a zero net financial position by 2028. Kepler Cheuvreux's projection, by contrast, calls for €316 million in net cash at that horizon. As part of its forecast updates the broker also revised down its fiscal 2027 EPS estimate by 8.6%.
Analysis and context
Kepler Cheuvreux's downgrade and forecast reductions reflect a reassessment of Interpump's near-term momentum after a fourth quarter that underdelivered on margins and EBITDA, chiefly due to hydraulic operations. The firm's 2026 guidance, centered on a low single-digit organic growth range and an expected decline in water jetting, prompted the broker to scale back future earnings and cash flow expectations.
Investors and market participants will likely focus on whether the hydraulics division's operational issues are transitory and the timing of any recovery in water jetting volumes. Free cash flow and net financial debt metrics will remain points of attention as management pursues its 2028 targets for sales, margins, and net financial position.
Key points
- Kepler Cheuvreux cut its rating on Interpump to hold and lowered the target price to €45 after management issued subdued 2026 guidance.
- Fiscal 2025 EBITDA was €462 million, below both the broker's and consensus estimates, with hydraulics responsible for the bulk of the shortfall.
- Management expects 2026 organic growth of negative 2% to positive 3%, driven by weakness in water jetting; hydraulics recovery is anticipated to continue but did not offset the guidance downgrade.
Risks and uncertainties
- Operational risk in hydraulics - Production inefficiencies in the fourth quarter contributed materially to the EBITDA miss, and management has not identified specific one-off items to explain the shortfall.
- Demand cyclicality in water jetting - Water jetting is expected to decline in 2026 and is described as late-cyclical, suggesting exposure to weaker end-market demand, particularly in the first half of 2026.
- Near-term growth uncertainty - Management's 2026 organic growth guidance is markedly below prior forecasts and consensus, creating uncertainty around revenue and margin trajectory for the upcoming year.