Is Meier Tobler Group AG (VTX:MTG) a Buy Despite Recent Stock Weakness?

Meier Tobler Group AG (VTX:MTG) has experienced a 7.6% decline in its stock price over the past three months, raising questions about its investment potential amid a backdrop of strong fundamentals and long-term growth prospects. While the short-term volatility may unsettle investors, a closer examination of the company’s financial health, strategic initiatives, and industry positioning suggests that the recent weakness could present a compelling opportunity for those with a patient, long-term outlook.

Short-Term Weakness: A Temporary Setback

The stock’s 7.6% drop since May 2025 contrasts with its 52-week total return of +37.52%, which includes a high of CHF 42.50 in July 2025 and a low of CHF 23.85 in September 2024 [1]. This volatility may reflect broader market jitters in the capital goods sector, which has faced headwinds from macroeconomic uncertainty. However, the company’s first-half 2025 earnings per share (EPS) of CHF 0.66, though down from CHF 0.72 in the same period of 2024, were dragged lower by a non-recurring CHF 9.9 million expense [1]. Analysts have noted that this unusual charge is unlikely to recur, suggesting that profitability could rebound in the second half of the year.

Strong Fundamentals: A Foundation for Resilience

Despite the recent dip, Meier Tobler’s financials remain robust. The company has delivered a 22% compound annual growth rate in net income over the past five years, far outpacing the 7.6% decline in the broader building industry [1]. Its return on equity (ROE) of 13% for the trailing twelve months to June 2025 [1]—supported by a gross margin of 48.84% and a net profit margin of 4.17%—demonstrates efficient capital utilization. While some sources report a higher ROE of 28.86% as of March 2025 [3], this discrepancy likely reflects the inclusion of non-recurring gains or seasonal factors. The more conservative 13% figure, derived from normalized operations, still positions the company well against industry peers.

Strategic Share Buybacks and Dividend Payouts

To further enhance shareholder value, Meier Tobler has initiated a second tranche of its 2025 share buyback program, aiming to repurchase up to CHF 6.0 million worth of shares at CHF 37.00 per share [2]. This move signals management’s confidence in the stock’s intrinsic value and aligns with the company’s strong balance sheet. Additionally, the firm’s upcoming dividend of CHF 1.60 per share [3] offers income-focused investors a yield of approximately 4.35% at the current price, further bolstering its appeal.

Long-Term Growth: A Path to Recovery

Analysts project that Meier Tobler’s earnings will grow at an 8.83% annualized rate over the next two years, driven by its diversified product portfolio and strategic focus on high-margin markets [4]. The company’s 2025 and 2026 revenue forecasts of CHF 516.02 million and CHF 523.76 million, respectively [2], indicate a disciplined approach to scaling operations without sacrificing profitability. With the recent non-recurring expenses behind it, the firm is well-positioned to capitalize on its strong margins and ROE to drive sustainable growth.

Conclusion: A Buy for the Patient Investor

While the short-term underperformance of MTG.SW may deter risk-averse investors, the company’s resilient financials, strategic share buybacks, and long-term growth trajectory make it an attractive candidate for those willing to ride out near-term volatility. The recent pullback offers a discounted entry point into a business with a proven track record of outperforming its industry and generating shareholder returns. As always, investors should monitor macroeconomic risks and sector-specific challenges, but for those with a multi-year horizon, Meier Tobler Group AG appears to be a compelling buy.

Source:
[1] Meier Tobler Group AG (VTX:MTG) Stock Has Shown Weakness Lately But Financials Look Strong: Should Prospective Shareholders Make The Leap?, [https://finance.yahoo.com/news/meier-tobler-group-ag-vtx-085936474.html]
[2] Meier Tobler Group AG Initiates Second Tranche of 2025 Share Buyback, [https://www.tipranks.com/news/company-announcements/meier-tobler-group-ag-initiates-second-tranche-of-2025-share-buyback]
[3] Meier Tobler Group AG (MTG.SW) Analyst Ratings, [https://finance.yahoo.com/quote/MTG.SW/analysis?p=MTG.SW]
[4] Meier Tobler Group (SWX:MTG) - Stock Analysis, [https://simplywall.st/stocks/ch/capital-goods/vtx-mtg/meier-tobler-group-shares]