Wacker Neuson — Recession Scenario

I believe we could experience a significantly deeper recession in the coming years, particularly in Europe.

The chain

High interest rates and rising energy costs = financial pressure on businesses and consumers = declining investment and consumption = rising unemployment and business insolvencies = falling economic output = a deeper recession, potentially accompanied by social feedback effects that could intensify these problems.

The impact on Wacker Neuson

Less investment in construction, industry and agriculture = falling demand for construction and agricultural machinery = declining order intake = lower capacity utilisation = increasing pressure on margins = falling profits and possible downward revisions to earnings expectations = a reassessment of the stock's valuation.

My long-term expectation

If this scenario is confirmed, I see significant downside potential in Wacker Neuson.

A stagflationary development could be particularly critical: demand collapses while energy and financing costs remain high.