On November 9, Power Machines announced appointment of two new top managers: the Director for Economics and the Director for Strategic Planning and Controlling. Both top managers previously worked at Severstal. The company's management shakeup is attributable to the entry of new large shareholder Alexei Mordashov, whose affiliate bought out 30.42% in Power Machines from Interros. The machine engineering holding's new owner is replacing part of the company's management.
New appointments underscore distribution of competences between the two largest owners – Alexei Mordashov and Siemens. According to the agreements reached, Alexei Mordashov is in charge of the company's strategy and raising financial resources. The German concern is in charge of technological support to Power Machines.
In our opinion, such distribution is optimum and will positively impact the company's operations. Each partner will contribute to the company resource, which it owns and which other partner lacks. Such distribution of responsibilities at the company will make it possible to maximize financials and stock valuations.
According to our estimates, the estimated share price of Power Machines, received based on a comparative analysis, is $0.208 with 12.5% upside potential, which corresponds to Hold recommendation.
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