Let’s start a dedicated thread for Valmet.
Does anyone know what’s dragging Valmet down? I didn’t find any particular news myself.
1 Like
Valmet has large orders from Mexico this year, and there’s a slight problem in the customers’ target market. Could it be due to that, in addition to the general confusion?
1 Like
I’ve started following it. Can’t Valmet be considered a quality company? The recent decline has been quite significant, even though a relatively recent analyst estimate gave a target price of 22 euros.
At what point should one jump on board? When Inderes turns more positive?
I think so when comparing the key figures, but it is admittedly a cyclical company. I was thinking the same thing, whether I should add more, but it would raise the average acquisition price, so I’ll wait for Inderes’ in-depth analysis.
1 Like
How much is Valmet tied to China? At least the pulp-related business - Valmet is falling, so it occurred to me if it’s due to China. @Antti_Viljakainen
2 Likes
In recent years, 10-15% of Valmet’s revenue has come from China (fluctuating with projects), so the direct sensitivity is not significant. Indirect sensitivity is, of course, greater, for example, through the pulp market. A weaker-than-expected Q2 report (including cuts in target prices and recommendations), subdued macro data, the tightening trade war, and generally sluggish news flow from the forest sector are likely the main drivers of Valmet’s stock price drop in recent weeks.
I see Valmet’s biggest short-term risks elsewhere than in pulp, as strategic investments, which are somewhat independent of cycles and short-term prices, are only recovering from the low levels of the past few years. Valmet is likely to secure a healthy number of large orders (though not with an optimal margin structure) in the coming years, leveraging its market position. The trade in spare parts and services for pulp machinery is also unlikely to hit a wall without a much more severe macroeconomic downturn than currently expected.
5 Likes
Thanks, @Antti_Viljakainen
I’ve already factored in the Q2 results, but I’ve been monitoring the price development of various engineering companies compared to their order books, for example, and I believe Valmet is among the top performers in this challenging sentiment.
I’ve been eyeing a position (haven’t made any moves yet) and was surprised when Valmet started such a significant decline in the past few days.
1 Like
I’ve also been pondering what caused the stock price to collapse. I jumped in earlier this week. Maybe I’ll increase my holdings once Inderes turns more in favor.
What on earth is wrong with Valmet’s stock price? This isn’t just about today. The sharp drop started already at the turn of the month, after the earnings report.
I can’t do TA, I just follow what these professionals do, but my gut feeling says we could go really low (trade war/recession worries are a strong driver), even though RSI is screaming OS. Some resistance might be found around €15.50. @DayTraderXL @Johannes_Sippola can share their professional opinions 
3 Likes
At the end of the month, we’ll have to check here to see which major owners have sold. In my opinion, this cannot be just about the general fuss due to global economic concerns. Or it could be, of course, but the change is just so drastic.
1 Like
My guess is that the market simply didn’t accept Valmet’s valuation multiples at this stage of the cycle, even though the order book is good. Confidence in the future seems to be lost; Valmet is not Kone 
Yes, it’s related to the bigger whales lightening their holdings. I haven’t found any negative news, at least. I was prepared to buy a batch when it broke 16, but I moved my order lower because the selling continues.
Hi @Nyyb.K, here’s a quick situational assessment of Valmet:
On a monthly level, Valmet is in a downward channel from the uptrend that ended in April. Support in such a decline should be sought from weekly or monthly levels (trend changes are a different matter, which can be sought from any timeframe, according to one’s own preference and risk tolerance).
On the weekly level, there are three weekly HL-pivots within the €15.10-€15.50 price range, so the €15 level is really important on a weekly basis. If it’s broken, the next HL-pivot is found on the monthly level at €12.47 (in the picture).
RSI is neutral on a monthly level, around 44. Only on the 1D level are we clearly oversold. On the 1W and 4H levels, RSI is almost exactly 30, so not yet oversold; in theory, they still allow for some decline. So, it’s not quite a screaming oversold situation yet. It’s also worth checking RSI on multiple timeframes, as usually an OS situation on one timeframe isn’t enough for a rebound.
MACD is bearish on larger timeframes (1D, 1W, 1M); I didn’t check lower timeframes. No divergence is found in MACD or RSI DIV Trend, so I haven’t found any bullish divergence situation myself either.
In summary: Valmet is approaching important levels, and buying opportunities may be on the horizon, but at the moment, I wouldn’t call this a screaming buy situation (this is not an investment recommendation)
I hope the answer was comprehensive enough! @DayTraderXL can add anything if desired/correct any possible errors!
Regards, Johannes S.
1 Like
All engineering workshops (and cyclical companies) have come down sharply recently. Valmet is probably going with the same flow, even though nothing seems to have changed for the company itself.. Maybe it will start changing soon? 
3 Likes
I’m out now. This was a rare short-term investment for me, and I already got cold feet. I held it for a month, and the price rose by about 10%.
I pulled out because the price exceeded Inderes’ target price, and because I consider the next 12 months to be a very uncertain time, during which cyclical stocks will jump up and down. Time will tell how wrong I am.
Valmet had a strong Q3, with good revenue growth and profitability rolling upwards on a faster-than-expected upward curve, driven especially by growth and an increase in gross margin. The company booked over a billion in new orders for Q3, which clearly beat the consensus and our order forecasts of around EUR 800 million, and also exceeded the comparable figure of around EUR 940 million. The order book once again rose to a record level. The significant exceeding of orders was explained especially by a larger pulp order from South America, which the company had not announced. No changes in guidance or market outlook. The share is deservedly on a clear rise after the good report.
5 Likes
What weighed on Valmet today? Share price drop of -5.39% for today. Are trade war comments behind this, or a downward correction after a good earnings report and share price increase?