GEA Earnings: Robust Demand Continues; Shares Overvalued

Order intake for wide-moat GEA Group continued its upward trajectory in 2024, rising 1.5% year over year to EUR 5.5 billion with organic growth of 4.6%. Strong demand across dairy processing, food, and pharma, coupled with a robust pipeline of large orders, helped offset ongoing macroeconomic uncertainties. Service revenue remained a key driver of profitability, expanding in all five divisions and accounting for approximately 38% of total revenue—up from approximately 36% in 2023. This positive mix shift contributed to an 8% increase in adjusted EBITDA to EUR 837 million, with EBITDA margins expanding by 100 basis points to 15.4%. With resilient end markets, an expanding high-margin service business, and disciplined capital allocation, GEA remains well positioned to maintain earnings growth. The stock has performed well over the past year, pushing it into overvalued territory. It is trading 20% above our unchanged EUR 48 per-share fair value estimate.