Today, the new quarterly figures from $AFX (-11,27%) which I took a very close look at. As many of you know, it's an absolute problem stock that has seen a total decline of around -90%, so even as an early bird investor, you've got a lot on your plate here.
Realizing losses hurts, which is why I have considered precise scenarios in advance under which I will immediately press "sell", no matter what happens. Such scenarios would be, for example, another disappointment in the market or a management that is not activist and only manages the downfall.
However, the actual prospects were well received by the market - but that doesn't automatically mean that I have high hopes for the share. Emotionally, at least for me, it's a good reason to "sell anyway" simply because the price is good today and then you simply have a certain kind of peace of mind when you dump bad stocks.
Rationally, the reasons for such a sale are always twofold: A) The money can work better elsewhere and achieve safer returns and B) There is a real risk of losing even more money than you have already lost.
At least reason A) is currently not a real argument for me. Especially after the recent sales and non-purchases, my cash ratio is currently higher than it has been since 2024. In this respect, I would NOT reinvest the money from a $AFX (-11,27%) I would NOT be able to reinvest the money from a sale, but only put it in the cash pile.
Nevertheless, this time I want to make absolutely sure that I don't react emotionally and continue to hold the share just because I'm afraid of losses or whatever. That's why I have once again sold Gemini (because my Claude volume is already empty again) to get a neutral view of things.
Disclaimer: The following text section was partly written with the help of AI - which I do transparently, unlike some weird coin farmers. If you're not interested, there's a "Sopranos conclusion" at the end
"1 Current market situation & H1 figures (as at May 2026)
The results presented today show a mixed but "relieving" picture for the market:
- Turnover: At approx. 991 million in the first half of the year, the company is 5.7 % below the previous yearbut exceeded analysts' greatly reduced expectations (following several profit warnings).
- Profitability: The adjusted EBITA margin slumped to 6.1 % (previous year: 10.7 %). The main reasons for this are currency losses (in particular the Chinese yuan), a weak product mix in China and high inventories.
- Restructuring: The newly announced program "ProfitUp" program program is intended to lift the margin back above 15% by the 2028/29 financial year and into the 16-20% range in the long term.
2. arguments for the valuation (pros & cons)
Market leadership: Zeiss remains a technogogical champion in ophthalmology (eye care) and microsurgery.
China risk: Business in China (approx. 21% of sales) suffers from government price targets (VBP) and geopolitical tensions.
Demographics: The long-term trend of an ageing global population is ensuring a steady increase in demand for cataract surgery.
Investment backlog: In the US, clinics are holding back on large equipment (microscopes) due to high interest rates and economic uncertainty.
Turnaround potential: With the "ProfitUp" program, management is aggressively addressing the cost structure for the first time.
Valuation: Despite the fall in the share price, the P/E ratio (P/E) of approx. 17-20 is not exactly cheap for the current growth rate of approx. 5%.
Order backlog: With 435 m € the cushion is solid, which provides a certain degree of planning security for the second half of the year.
Currency effects: The strong dependence on exports makes Zeiss susceptible to fluctuations in USD and CNY.
3. analyst estimates & price targets
The majority of institutional analysts have changed their recommendations in recent months to "Hold" downgraded to "Hold". However, after today's figures there are first positive comments:
- Barclays: "Equal Weight" (Neutral) with target price 30 €.
- Goldman Sachs: "Hold" with target price 31 € (recently lowered from € 36).
- JPMorgan: Remains rather skeptical with a "Sell"-rating, but sees the bottom approaching.
- Consensus price target: Currently moves in a range of 28 € to 33 €.
4 Conclusion: Buy, Hold or Sell?
Rating: HOLD
- For existing shareholders: Selling at the current level (approx. € 28) does not appear to make much sense, as operating margins have probably bottomed out. Today's share price reaction shows that much of the negative has already been priced in.
- For new buyers: There is no urgent need to enter the market yet. Although the long-term potential is intact, the implementation of the restructuring program will take time. The share is currently a bet on a recovery in China and the success of the internal efficiency measures.
Recommendation: Watch for confirmation of the uptrend. A sustained breakout above the 32-euro mark could generate a technical buy signal. Conservative investors should wait for the next quarter to see whether the erosion of margins has actually been halted."
Soprano's conclusion: I will stick to this recommendation for the time being, but will update the case regularly. Basically, I have emotionally closed the Zeiss chapter, but I would actually find it pointless to sell if I am not doing anything with the money anyway and the bottom seems to have been reached.
At the moment we are in a "kitchen sink", i.e. a period in which everything negative is already included in the share price and pessimism is at its maximum - that's why the share price is rising despite poor figures, because the fears were even more negative.
AFX is now reacting. They want to increase the margin. They are cutting jobs - especially in their currently worst economic location (Germany). If this turnaround does not succeed, they can still close down the whole business and sell the silverware. That would be at a price of €20. It would then also be extremely interesting as a takeover candidate. At the moment, however, the market believes in the restructuring. If this actually succeeds or at least progress is evident, a few more euros can be picked up by the fall and then still be sold with a sufficient loss (don't worry, we won't get out of this in the foreseeable future)
