Wartsila (WRT1V.HE): Order beat, but mid-term margin target looks somewhat light vs expectations

Citi's flash note on Wartsila (WRT1V.HE) keeps a Sell rating and €28.00 target price (share price €28.76, expected total return -0.7%). In 3Q26 Wartsila beat local consensus orders by 15% (book-to-bill 1.59x vs 1.40x), beat revenues by 2% and adj. EBIT by 1%, with margins in line at 14.2%. Energy orders beat local consensus by 34% with a strong 17.5% margin, while Marine orders missed by 5% and margins came in 90bps light at 12.2%. Cash flow from operations was €578m, again helped by working capital. The key focus is the new mid-term targets announced with results: low double-digit organic sales growth, a 16% group operating margin and FCF conversion above 90% of net income, with Marine at 14% and Energy at 18%, and no target year specified. Citi views the margin target as somewhat light versus its own ~17% estimate and Visible Alpha 2030E consensus of ~17%, implying low-single-digit consensus downgrades and risk of a "travel-and-arrive" guide. Valuation blends SotP and DCF (WACC 9.0%,