Following a weak FY16, Wacker Neuson (WAC) returned to its profitable growth path in 9M17, with sales up 12.7% y-o-y and adjusted EBIT margin up 300bp y-o-y to 9.5%. This was driven by the upturn in both construction and agricultural machinery markets. Management raised its FY17 sales guidance to the upper end of €1,450-1,500m from €1,400-1,450m in March. Solid balance sheet headroom (net debt/EBITDA FY17e at 0.9x) allows for further investments into extending WAC’s global reach (medium-term target of 40% sales outside Europe vs 25% in FY16). The shares are trading on a FY17e P/E of 20.7x, implying a c 18% discount to the peer average.

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