Rational Delivers Record Revenue Growth and Rewards Investors With Special Dividend; Raising Our FVE

Narrow-moat Rational reported 31% revenue growth, exceeding our estimates and management’s revised guidance provided at the end of September 2022. Price increases of 10% and the easing of supply chain constraints for electronic components, thereby accelerating deliveries on the group’s order book, supported its outperformance. We see plenty of runway ahead, which is consistent with management’s high-single-digit revenue growth guidance for 2023. We raise our fair value estimate to EUR 570 from EUR 540, which incorporates the group’s better-than-expected top-line performance as well as the spillover effect of already announced price increases. Shares remain fairly valued.