UBS upgraded its recommendation on Technogym to buy from neutral on Wednesday, citing what it described as an improved risk-reward profile following a sharp re-pricing of the Italian fitness equipment maker. The broker also raised its 12-month price target to €21.30 from €21, arguing that consensus earnings expectations have stabilised after downward revisions in recent weeks that occurred alongside the share price fall.
At the centre of UBSs reassessment were the companys first-half results and subsequent management discussions, which the broker said increased confidence that earnings downside is now more contained provided there is no material deterioration in the macroeconomic backdrop. UBS singled out the third-quarter results as a potential catalyst for the shares, noting that Technogym is trading at roughly 11 times estimated 2027 EV/EBITDA, a valuation the broker sees as offering a more compelling risk-reward tradeoff.
UBS acknowledged investor caution that developed after the stock peaked in mid-May. That caution was driven by concerns about macroeconomic conditions, slowing revenue growth, inflationary pressures and the potential effects on margins. But the broker said its talks with management after the half-year results suggested the slowdown in growth was driven primarily by delivery and production issues rather than a meaningful drop in demand.
On the numbers, UBS noted that Technogym reported first-half revenue of €493 million, essentially in line with UBSs €491 million estimate, while adjusted EBITDA came in at €86 million, slightly ahead of the €85 million forecast. The adjusted EBITDA margin was 17.4%, down 110 basis points from the prior year, a contraction UBS attributed to higher freight costs and increased procurement prices for raw materials and components.
According to UBS, second-quarter growth softened mainly because international shipment delays related to ongoing conflict and disruption to production pushed some deliveries beyond their original schedules. Management, the broker added, indicated there had been little change in the underlying demand picture or in order-book trends despite these timing issues.
Supporting the outlook for the latter half of the year, UBS pointed out that order intake and backlog were growing at double-digit rates across all regions. The broker also highlighted a mid-single-digit list price increase implemented in July, which management expects will help offset cost inflation. UBS noted the benefits of that price action will be more visible from the fourth quarter, given the lag inherent in the existing order book.
Reflecting persistent cost pressures, UBS trimmed its 2026 adjusted EBITDA margin forecast by 70 basis points to 20.9%, while leaving its underlying assumptions from 2027 onwards broadly unchanged. The broker cut its 2026 earnings-per-share forecast by 3.7% but modestly raised forecasts from 2027 forward, citing foreign exchange effects.
Looking ahead, UBS said 2027 should be an easier year for Technogym as the company benefits from the full impact of the price increases, the potential catch-up of delayed deliveries and a more favourable cost base. The broker identified those factors as contributors to a clearer path back to margin recovery and earnings growth beyond 2026.
Bottom line: UBSs upgrade reflects a view that the recent valuation reset, combined with stabilising earnings expectations and operational moves such as pricing, have improved the stocks investment case, while risks remain tied to costs and the macro environment.