Following Gabriel’s announcement last week to postpone its FY’23/24 financial reporting due to financial reporting challenges in the Group’s Mexican subsidiary, along with new FY’24/25 guidance on its continuing operations, we have revised our estimates lower and now see higher short-term uncertainties until clarifying news is announced, potentially in the beginning of January 2025. Consequently, we lower our recommendation to Reduce (previously Accumulate), and lower our price target to DKK 225. In the short term, the attractiveness of the investment case is dominated by uncertainties and slower market recovery than expected, however, the long-term potential remains when the market turns more favorable and potentially also when more visibility about the FurnMaster carve-out and the Mexican production unit is provided.

On Thursday, Gabriel announced that it is postponing its FY’23/24 financial reporting from 20 November 2024 to a date in 2025 (TBC by 8 January 2025 at the latest) due to financial reporting challenges in the Group’s Mexican subsidiary, including a key employee resignation and uncertainty surrounding the subsidiary’s inventories. Gabriel’s annual general meeting will be held on 29 January 2025. Gabriel also maintained its full-year expectations for the 23/24 financial year, against our expectations of an upgrade. The company also announced its new guidance for 24/25 on its ongoing operations, with the management still expecting challenging market conditions. We see a high degree of short-term uncertainty before the FY’23/24 report and more news about the FurnMaster business unit is announced. Based on the news, there is some downward pressure on our previous estimates and valuation, and we will update our estimates, target price, and recommendation for Gabriel in the coming days. 

Gabriel delivered its first group revenue growth y/y since Q4’21/22 in a sign that momentum may be turning in Gabriel’s favor. Guidance was maintained and expected to land in the top end of the interval, and we believe that EBIT guidance is particularly conservative, with a 9m Q3’23/24 EBIT result above the top-end interval. Cost cutting and efficiency gains contributed to margin expansion in Q3, which, in combination with positive development in leading macroeconomic and industry indicators suggest that Gabriel is on the turn-around path outlined in our projections.

Gabriel Holding (Gabriel) will report its Q3 2023/24 report on Thursday, 29th August. The company has faced challenging markets in recent years as higher interest rates have reduced real estate activity in both commercial and residential sectors. However, in recent quarters, we have seen an improving rate of change in Gabriel’s revenue development - we expect to see this continue.

Gabriel announced this morning that the company is initiating a carve-out of its FurnMaster business area, which holds a strong position in the furniture production market in Europe and the US. Gabriel no longer considers this business area to be within the company's growth strategic definition.

We are pleased to share our extensive research report on Gabriel, a prominent player in the global furniture fabrics industry. Watch our detailed video to gain insights into the current market dynamics, competitive landscape, risks, and valuation of Gabriel.

Gabriel is a niche company within the global furniture industry, which throughout the value chain develops, manufactures, and sells furniture fabrics, components, upholstered surfaces, and related products and services.

Read our first Gabriel Holding One-pager introducing the investment case behind the furniture fabrics company, which has roots back to 1851 and today is a niche B2B company within the global furniture industry across the full value chain developing, manufacturing, and selling furniture fabrics, components, upholstered surfaces, and related products and services. It operates three primary business units: Fabrics, FurnMaster, SampleMaster, and also Screen Solutions.