Buy this tech firm that’s quietly automating warehouses with robots, say Berenberg and Citi — giving it 50% upside
Investment banks are telling investors to buy shares in AutoStore, a Norwegian warehouse automation company, with price targets suggesting potential gains of more than 50% over the next 12 months. AutoStore , founded in 1996 and listed since 2021 in Norway, provides robots and technology to automate traditional warehouses. The company has grown to control approximately 80% to 90% of the market, according to German investment bank Berenberg. AutoStore shares are also traded in the U.K. and Germany . The use of these systems means warehouses can store items four times more densely than manually operated warehouses while retrieving products faster than human workers, according to the company. The increased efficiency and lower operating costs for its customers have allowed AutoStore to command significant profit margins, making its shares more valuable. “AutoStore generates best-in-class [adjusted profit] margins of [approximately] 48%, on average, thanks to the scalability of its partnership distribution network and the high degree of software integration that its products offer,” said Lasse Stueben, equity analyst at Berenberg. The investment bank initiated coverage with a price target of 15 Norwegian kroner ($1.37), pointing to roughly 50% upside from the current share price level. The company reported $154 million in sales and nearly $80 million in adjusted profits in the quarter to June. However, AutoStore’s management has forecast that revenues could fall to $600 million for the full year, down by 7.2% compared to last year. AUTO-NO 1Y line The fall in sales for a growth-oriented company has contributed to the hefty decline in its stock price this year. However, analysts say the soft macroeconomic environment in Europe and large companies delaying investment decisions in automated warehouses have led to a temporary downbeat mood across the sector, which investors should capitalize on. “We think that this an opportunity to own a quality name at trough sentiment ahead of a return to growth in 2025 as customers regain comfort in warehouse automation investments in a declining interest rate environment,” Stueben added. The Berenberg analyst is not alone on the bullish call. Citi analysts are also optimistic about the long-term outlook for the company despite the short-term headwinds. The Wall Street bank’s analysts, led by Martin Wilkie, said the effectiveness of AutoStore’s technology was demonstrated by real-world results while visiting British e-commerce group THG plc , a customer of AutoStore. “There remains a clear disconnect between a subdued near-term picture, and a very appealing long-term story,” said the analysts in a note to clients on Sept. 18. “Customer stickiness is high and payback times are impressive, limiting somewhat the incentive to cut prices.” The investment bank expects the “high risk” stock to rise 58% over the next 12 months to 16 Norwegian kroner. THG plc, a food nutrition firm and owner of MyProtien, said it recouped 80% of its investment in AutoStore’s robots within the first year of operation, according to the Citi analysts. Similarly, Berenberg noted that customers typically recover their investment within one to three years, making the technology an attractive proposition despite its upfront costs. Analysts at Norway-based Arctic Securities have the most bullish outlook with an 18 Norwegian krone price target, indicating a 78% upside. Their analysts even dismissed reports of potential competition from Big Tech giant Amazon . Instead, they cited media reports that Amazon will likely rely on AutoStore’s technology in its grocery rollout in the United States.
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