Shares of Rieter fell 15.8% to 2.50 Swiss francs on Thursday, 90 minutes into trading, after UBS downgraded the textile-machinery manufacturer's rating to "Sell" from "Neutral" and lowered its price target to 2.00 francs from 3.10 francs.
The downgrade follows the company's half-year results and an ongoing weakness in global textile markets. An UBS analyst wrote that demand is likely to recover more slowly and less strongly than previously expected, adding that she foresees no significant improvement in order intake through 2027. Analysts attributed the cautious outlook to overly high market expectations regarding pricing pressure and only modest volume growth. UBS maintained that Rieter's current valuation remains demanding given the weak fundamentals.
Rieter's stock has already suffered a sharp decline over the past year. In mid-September 2025, the share traded at 7.88 francs before halving to 3.27 francs within a month, driven by a capital increase. The stock has not staged a meaningful recovery since and has remained at depressed levels.
On the operating side, revenue in the first half of fiscal 2026 rose roughly 12% year over year to 574 million Swiss francs, boosted by the September 2025 acquisition of Barmag. However, analysts had been expecting stronger revenue growth and higher new-order volumes. The company also reported an operating loss for the half-year period, underscoring the headwinds facing the business.
The textile-machinery sector continues to grapple with soft global demand, elevated input costs, and uncertainty around investment cycles among downstream producers. Rieter, headquartered in Winterthur, Switzerland, remains one of the largest manufacturers of spinning and weaving equipment globally, but investors are waiting for clearer signs of a sustained upcycle.
