RBC Capital Markets on Feb. 26, 2026 moved OC Oerlikon Corporation AG from an "outperform" rating to "sector perform," while raising its one-year price target to CHF4.40 from CHF3.90. The research note said the change reflects a near 50% re-rating of the stock since November that now has Oerlikon trading close to what RBC views as a full valuation.
Shares were quoted at CHF4.24 on the SIX Swiss Exchange, giving only about 4% upside to the new CHF4.40 target. The downgrade follows a period of stronger-than-expected operational results - most notably a fourth quarter in which organic order intake rose 17% year-on-year, well ahead of the 5% consensus forecast.
Valuation framework and multiples
RBC’s CHF4.40 target is derived from an average of two valuation approaches. A discounted cash flow analysis produces a fair value of CHF4.15, while a multiples-based approach yields CHF4.63. Both outputs are subject to a 20% valuation discount to the European capital goods sector in RBC’s work, resulting in the blended target.
Based on current consensus estimates for 2026, the stock trades at about 17x estimated 2026 EV/EBITA and 22.2x estimated 2026 price-to-earnings. RBC adjusts those figures to account for a one-off CHF0.85 special dividend, which the bank says is equivalent to a 20% yield; stripping out that cash return produces what RBC calls an "underlying" multiple - roughly 15x 2026 EV/EBITA and 17.9x 2026 price-to-earnings - levels the bank characterises as "a fair valuation."
Special dividend and Barmag sale
The CHF0.85 special dividend amounts to about CHF289 million and was partially funded by proceeds from the sale of Barmag. RBC expects the Barmag disposal to generate a gain approximately CHF77 million higher than previously guided, an amount equivalent to around 5% of Oerlikon’s market capitalisation, and anticipates that gain will be booked in the first half of 2026.
RBC had earlier modelled a smaller CHF0.15 dividend and warned that a larger payout could slow deleveraging. Under RBC’s updated calculations, net debt-to-adjusted EBITDA would be 2.8x by end-2027, versus management’s guidance of 2x.
In addition to upfront consideration, the Barmag transaction includes a potential CHF100 million earn-out. RBC applies a 50% probability to that contingent payment and, after assuming a 15% capital gains tax, adds CHF43 million to its DCF enterprise value.
Recent results and management guidance
For full-year 2025, Oerlikon reported revenues of CHF1.57 billion and operating EBITDA of CHF271 million, representing a 17.3% margin and beating consensus by 10 basis points. The company recorded a net loss of CHF19 million for the period.
Management set 2026 guidance at "low single-digit organic growth," and signalled only modest margin expansion of 20-30 basis points. The company cited softness across general industries, tooling, automotive and luxury end markets, and pointed to tariff uncertainty. Management said it "chose a guidance that would minimise the risk of a profit warning later this year."
RBC’s forecast revisions and cash flow outlook
RBC lifted its 2026 organic revenue growth forecast by two percentage points to 7% and raised its 2027 projection by two points to 6%, citing improved eurozone purchasing managers indexes that rose to 50.8 in February from 49.5 in January, the highest reading in over three years. The bank also increased operating EBITDA margin assumptions by 10-20 basis points, forecasting 17.8% in 2026 and 18.2% in 2027, with a long-term ceiling at 19.2%.
Free cash flow to equity is now estimated at CHF335 million for 2026 - a level boosted by Barmag proceeds - before normalising to CHF86 million in 2027 and CHF103 million in 2028. RBC notes the implied free cash flow yield for 2026-2028 averages 6-7%, which is above the sector average of 5.4%, but adds that Oerlikon’s low free float constrains the valuation upside.
Key DCF assumptions used by RBC include a weighted average cost of capital of 8% (down from 8.5% following lower financial leverage after the Barmag sale), a terminal EBITA margin of 11.8% and a terminal growth rate of 2%.
Scenarios, earnings and final view
RBC outlines a downside scenario valuing the stock at CHF3.00 per share and an upside scenario at CHF4.60. The bank’s adjusted diluted EPS estimates are CHF0.20 for 2026, rising to CHF0.29 in 2027 and CHF0.35 in 2028.
In summary, RBC has moderated its recommendation to reflect a material rerating of the share price and a larger-than-expected special dividend funded in part by the Barmag divestment. While near-term operating momentum and improved macro indicators support slightly higher growth and margin assumptions, RBC flags slower deleveraging versus management targets as a result of the higher payout.
Note: valuation metrics, forecasts and scenario outcomes are those presented by RBC Capital Markets in its Feb. 26, 2026 research note.