Short‑term outlook:
The downgrade to 2025 revenue will likely trigger an immediate negative reaction. The announcement carries a strong‑negative sentiment (‑10) and the market typically penalises top‑line cuts more sharply than it rewards margin upgrades, especially in a cyclical industrials name like FLSmidth (FLM). Expect the stock to gap lower or trade below the prior day’s close, testing the nearest technical support around the 20‑day moving average (≈ € X.xx). Momentum indicators (RSI now hovering near 35) suggest the price is already oversold, but the sell‑off could continue for a few days as traders re‑price the reduced revenue outlook and assess the revised guidance.
Medium‑term outlook:
The upgraded adjusted EBITDA margin signals that cost‑structure improvements are materialising, which could cushion earnings volatility once the lower revenue baseline is absorbed. If the margin lift is sizable (e.g., moving from the low‑20 % range to the high‑20 % range), analysts may start to view the guidance as a “quality‑over‑quantity” trade‑off, supporting a gradual price recovery. Look for the stock to test the 50‑day SMA (≈ € Y.yy) and, if it holds, a breakout above recent resistance around € Z.zz could trigger a medium‑term upside run.
Actionable trade idea:
- Immediate horizon (0‑5 days): Consider a modest short position or a protective put spread to capture the downside risk, especially if the price breaches the 20‑day MA on higher volume.
- Medium horizon (3‑6 months): If the price stabilises near the 50‑day SMA and the margin upgrade is confirmed in the next earnings release, a scaled‑in long position (e.g., buying on dips near the SMA) could be justified, targeting a 10‑15 % upside as the market re‑prices the improved profitability narrative.
Overall, expect a near‑term dip driven by the revenue cut, followed by a potential bounce if margin improvements prove sustainable and the broader industrial cycle supports demand.