BEAN

Belimo Holding AG

CHF 894.5 11B market cap February 21, 2026

Belimo Holding AG BEAN BUFFETT / MUNGER / KLARMAN SUMMARY

1 SNAPSHOT

PriceCHF 894.5

Market Cap11B

2 BUSINESS

Belimo is the world's finest HVAC component company -- a Swiss hidden champion with 50 years of market leadership, 32% ROE, a fortress balance sheet, and a widening moat reinforced by data center demand, building renovation mandates, and continuous R&D innovation. H1 2025 demonstrated genuine business acceleration with 20.6% revenue growth, EBIT margin expanding to 22.8%, and data center sales surging 50%+. However, at 64x trailing earnings and 19x book value, the stock prices in decades of flawless execution with no margin of safety. Even our most optimistic DCF (15% growth for 5 years, 8% for 5 more) yields a fair value of CHF 479, implying 87% overvaluation. The business deserves the highest quality rating (10/10), but the price demands patience. Accumulate only below CHF 280 for a 20% margin of safety to conservative fair value of CHF 350.

3 MOAT WIDE

#1 global HVAC actuator maker (21% share) for 50 years, 15-25yr product switching costs via installed base, 7.7% of sales invested in R&D, 44% OEM design-in relationships, regulatory tailwinds from energy efficiency mandates

4 MANAGEMENT

CEO: Lars van der Haegen

Conservative and excellent -- 7.7% of sales to R&D (industry-leading), zero M&A (pure organic growth), net cash balance sheet, growing dividends, minimal buybacks. Appropriate for a quality compounder.

5 ECONOMICS

22.8% Op Margin

36.5% ROIC

32.4% ROE

64.4x P/E

0.122B FCF

-12.4% Debt/EBITDA

6 VALUATION

FCF Yield1.1%

DCF Range346 - 479

Overvalued by 117-158%

7 MUNGER INVERSION

Kill Event	Severity	P()	E[Loss]
Extreme valuation (P/E 64x) -- if multiple compresses to 30x (still premium), stock falls 53%	HIGH	-	-
Data center cycle peak -- Americas (50% of sales) growing 30% driven by AI infrastructure; cyclical risk	MED	-	-

8 KLARMAN LENS

Downside Case

Extreme valuation (P/E 64x) -- if multiple compresses to 30x (still premium), stock falls 53%

Why Market Right

At P/E 64x, any growth disappointment causes sharp de-rating; Data center capex could cycle downward if AI investment slows; Swiss franc strength compresses reported earnings growth; FY2025 earnings release Feb 23, 2026 -- high expectations baked in

Catalysts

Data center cooling demand accelerating (50%+ growth) -- structural multi-year tailwind; Building renovation wave driven by energy efficiency regulations globally; Americas reshoring driving new commercial/industrial construction; Revenue crossed CHF 1B milestone; EBIT margin expanding to 22.8%

9 VERDICT WAIT

A+ Quality Fortress -- virtually debt-free (D/E 0.04), equity ratio 76%, net cash position, unbroken 50-year profitability

Strong BuyCHF 245

BuyCHF 280

Fair ValueCHF 479

Strong Buy below CHF 245, Accumulate below CHF 280, Watch below CHF 500

10 MACRO RESILIENCE +2

Neutral Required MoS: 25%

Monetary

-1

Geopolitical

Technology

Demographic

Climate

Regulatory

Governance

Market

-6

Key Exposures

Energy Transition Tailwind +3 Building efficiency regulations globally drive demand for precision HVAC control. EU renovation wave and US building codes favor Belimo's products.
AI Infrastructure Tailwind +3 Data center cooling is critical. Americas growth (46% of sales) driven by hyperscaler buildout requiring precision temperature control.
Valuation Compression Risk -6 At 65x P/E, stock requires 15%+ growth for 15+ years to justify. Any sentiment shift or growth disappointment triggers severe rerating.

BEAN is macro-resilient with concentrated valuation risk. Strong tailwinds from energy efficiency (+3) and data center infrastructure (+3) offset modest currency headwinds. The business benefits from climate adaptation spending. However, the -6 valuation compression score reflects imminent risk: at P/E 65x, any growth deceleration triggers severe multiple contraction. Total score +2 (Neutral) requires standard 25% MoS. Current price CHF 780 is 189% above fair value (CHF 270). Wait for 40%+ pullback to CHF 450 before considering entry.

🧠 ULTRATHINK Deep Philosophical Analysis

BEAN - Ultrathink Analysis

The Core Question

The question is not whether Belimo is a great company. The 50-year unbroken record of profitability, the 32% return on equity achieved with virtually zero leverage, the widening moat in a niche where being number one actually matters -- all of this is beyond dispute. Belimo is, by any reasonable measure, one of the finest industrial companies in the world.

The real question is more uncomfortable: At what price does excellence become a trap?

When you pay 64 times trailing earnings for a company, you are not buying a business -- you are buying a belief. The belief that this company will grow earnings at 12-15% annually for the next 15-20 years, that margins will never compress, that no competitor will ever dent its moat, that the Swiss franc will cooperate, and that the market will continue to assign a luxury multiple to an industrial company. That is a lot of beliefs stacked atop one another, each with its own probability of being wrong.

H1 2025 made the bull case more compelling: 20.6% revenue growth, EBIT margin expanding to 22.8%, data center sales surging 50%. But it also made the stock more expensive. The share price has risen faster than the business has improved. The gap between price and value has widened, not narrowed.

Moat Meditation

Let me think carefully about what actually protects Belimo's economics.

The typical answer -- "brand" or "market share" -- is insufficient. Plenty of market leaders have been dethroned. Nokia had 40% smartphone market share in 2007. Kodak invented digital photography. Size and reputation alone do not constitute a durable moat.

Belimo's moat is architectural. It operates at the intersection of four self-reinforcing advantages:

First, the specificity trap. When an OEM designs a Belimo actuator into an HVAC system, that specification cascades through the entire engineering chain. The HVAC unit, the building management system, the control protocols -- all calibrated to Belimo's products. Switching suppliers means re-engineering the entire system. This is not like switching from Coke to Pepsi. It is like changing the electrical wiring standard in a building that has already been built.

Second, the invisibility premium. HVAC actuators cost perhaps 0.1-0.5% of total building cost. They are invisible to building owners, tenants, and even most facility managers. But when they fail, the consequences are immediate and severe: data centers overheat, hospital operating rooms lose climate control, office buildings become uninhabitable. This combination -- negligible cost, extreme criticality -- is the single best position for sustaining pricing power. Nobody negotiates hard on actuator prices. Nobody switches suppliers to save 0.02% on a building budget. But everyone remembers when the HVAC failed.

Third, the innovation flywheel. Belimo invests 7.7% of revenue in R&D -- roughly CHF 73M per year. For a company of its size, this is extraordinary. The result is a continuous stream of proprietary products: the Energy Valve, RetroFIT+ solutions, liquid cooling for data centers, IoT-connected sensors. Each new product category widens the moat by creating new switching costs and deepening the installed base. And because Belimo is the only pure-play HVAC field device company of scale, its R&D is entirely focused. Siemens and Honeywell spread their research budgets across hundreds of divisions. Belimo concentrates every franc on actuators, valves, and sensors.

Fourth, the regulatory ratchet. Energy efficiency regulations are a one-way door. Once a government mandates building energy performance standards, it never walks them back. The EU Green Deal, the US Inflation Reduction Act, China's carbon neutrality targets -- these create permanent demand for precisely-controlled HVAC systems. Belimo's products are the mechanism through which buildings comply. Every new regulation widens the moat by raising the technical requirements that only established players can meet.

Is this moat widening? I believe it is, and the data supports this. The data center boom is not just a revenue opportunity -- it is a moat extension. Data centers demand the highest-reliability, most precisely-controlled HVAC components available. A five-degree temperature deviation can crash millions of dollars of servers. This is Belimo's sweet spot: maximum quality requirements, minimum price sensitivity. As data centers become a larger share of Belimo's business, the average quality specification of its customer base rises, making the moat deeper.

The Owner's Mindset

Would Warren Buffett own Belimo at CHF 894?

The answer is almost certainly no, and the reason illuminates a principle that value investors frequently forget.

Buffett has said: "It's far better to buy a wonderful company at a fair price than a fair company at a wonderful price." But he has never said it is wise to buy a wonderful company at any price. When Buffett acquired See's Candies in 1972, he paid about 12x earnings for a business with a dominant local brand and exceptional returns on capital. When he bought Coca-Cola in 1988, he paid about 15x earnings during a temporary fear of stock market crashes. Quality, yes -- but always with price discipline.

Belimo at CHF 350 would be a Buffett-style purchase: exceptional quality at a fair price. Belimo at CHF 245 would be even better: exceptional quality with a margin of safety. Belimo at CHF 894 is a different proposition entirely: exceptional quality at a price that assumes perfection for decades.

The test is simple. At 64x earnings, an investor buying Belimo today earns a 1.6% earnings yield. A Swiss government bond currently yields about 0.7%. The equity risk premium is approximately 0.9%. That is woefully inadequate compensation for the risks of equity ownership, regardless of quality.

If you owned the entire company -- all 12.3 million shares at CHF 894, paying CHF 11 billion -- you would receive approximately CHF 170 million per year in net income. That is a 1.6% return on your capital before any growth. Even if you could grow those earnings at 12% annually for 10 years, your total return would still be mediocre because you overpaid at the outset.

The arithmetic is unforgiving. Great businesses can be terrible investments at the wrong price.

Risk Inversion

What could destroy Belimo? Let me think through the scenarios honestly.

The data center dependency. This is the risk I worry about most. Americas revenue grew 30% in H1 2025, now representing 50% of total sales, driven substantially by data center demand. Data center sales themselves grew 50%+. The company is becoming increasingly dependent on a single application that is itself dependent on a single technology trend: AI infrastructure investment.

History teaches us that infrastructure booms have cycles. Telecom in 2000: companies built massive fiber optic networks, spending peaked, and the bust destroyed trillions in value. Shale oil in 2014: drilling surged, production overshot, prices collapsed. Bitcoin mining in 2017-2018: hardware demand surged, then cratered. The AI infrastructure buildout may be different in its ultimate trajectory, but the path will not be linear. If hyperscaler capital expenditure slows from "unprecedented" to merely "strong," Belimo's Americas growth could decelerate sharply.

The mitigant is that Belimo's data center products are embedded in physical infrastructure with 15-25 year lifespans. Even if new construction slows, the installed base creates replacement and upgrade demand. And data centers still represent a minority of total sales -- the core building automation business continues regardless. But the marginal growth -- the growth the stock price is capitalizing at 64x -- is heavily dependent on the data center cycle continuing.

The valuation trap. Microsoft is the perfect case study. In December 1999, Microsoft traded at 72x earnings. It was an extraordinary business -- dominant market position, high margins, network effects. From 2000 to 2012, Microsoft's revenue doubled, its earnings tripled, and its stock fell 60%. The business performed superbly. The stock performed terribly. Because the starting multiple compressed from 72x to 12x, overwhelming years of business improvement.

Could this happen to Belimo? It could. At 64x earnings, if the multiple contracts to 25x over 10 years while earnings double (a generous assumption), the stock would be worth about CHF 700 -- a 22% decline from today's price. All that business excellence, all that earnings growth, all the data center tailwinds -- and you still lose money, because the starting price was too high.

Chinese competition. I assign this lower probability but higher impact than most investors. Chinese manufacturers have successfully commoditized solar panels, wind turbines, EV batteries, drones, and telecommunications equipment. They are world-class at producing industrial products at scale and at low cost. HVAC actuators are not exempt from this capability. The timeline is likely 7-15 years, not imminent. But the trajectory is clear: what Chinese industry targets, it eventually masters.

Valuation Philosophy

Price and value are different things. Belimo's value -- its intrinsic worth as a business -- is approximately CHF 350 per share under conservative assumptions, or CHF 480 under optimistic assumptions. Its price is CHF 894. The gap is not small, and it is not justified by growth that has not yet occurred.

I have raised the intrinsic value estimate from CHF 270 (December 2025) to CHF 350 (February 2026) to reflect the H1 2025 acceleration. This is appropriate: when a business genuinely accelerates, fair value rises. But even after this upward revision, the stock remains 156% above intrinsic value. The business improved 30%; the stock appreciated 15%; the premium expanded.

There is a school of thought that says quality companies should never be analyzed through traditional valuation frameworks. "You can't put a P/E on a Picasso." This is dangerous thinking. Every asset has a price at which it becomes a poor investment. Every stream of cash flows has a present value that depends on growth rates and discount rates, not on aesthetics. Belimo's cash flows, however beautiful, are finite and discountable. At 64x earnings, the discounted future does not justify the present price.

The Patient Investor's Path

The correct action is the hardest action: nothing.

Belimo should sit on the watchlist at the highest priority level. The business quality is 10/10. The moat is widening. The secular tailwinds -- data centers, building renovation, energy efficiency -- are genuine and strengthening. Management is competent and conservative. The financial structure is pristine.

But the price is 156% above intrinsic value. No position is warranted.

What would change this? A significant correction. The catalysts for correction are identifiable: data center capex slowdown, general market rotation from growth to value, earnings disappointment (even a minor one at these multiples), or Swiss franc appreciation compressing reported growth. Any of these could bring the stock within range of intrinsic value within 12-24 months.

The February 23, 2026 earnings release is the next critical data point. If FY2025 confirms the H1 acceleration (15-20% revenue growth, EBIT margin above 20%), intrinsic value may rise further. But so, likely, will the stock price. The approach must remain anchored to absolute valuation discipline, not to momentum or relative pricing.

The soul of this investment case is patience meeting excellence at the right price. The actuators will keep turning. The valves will keep regulating. The data centers will keep cooling. And someday -- when fear replaces euphoria, when a recession compresses multiples, when Mr. Market offers us this business at 25-30x earnings instead of 64x -- that will be the day to act.

Until then, the watchlist. The discipline. The wait.

Quality is eternal. The multiple is temporary. And discipline is everything.

Belimo Holding AG (BEAN.SW) - Investment Analysis

Analysis Date: February 21, 2026 Current Price: CHF 894.50 Market Cap: CHF 11.0 billion Exchange: SIX Swiss Exchange Currency: CHF

Executive Summary

Investment Thesis (3 Sentences)

Belimo is the undisputed global market leader in HVAC field devices -- actuators, control valves, and sensors -- commanding ~21% of the global HVAC actuator market with a 50-year track record of innovation, consistent profitability, and fortress-like financial strength (D/E 0.04, equity ratio 76%). The business is accelerating: H1 2025 revenue grew 20.6% in local currencies with EBIT margin expanding to 22.8%, driven by explosive data center demand (up 50%+ YoY) and the Americas region growing 30%, pushing TTM revenue above CHF 1 billion for the first time. However, at P/E 64x (TTM) and 19x book value, the stock prices in decades of flawless execution with a deeply negative margin of safety, making it a superb business that remains uninvestable at current prices.

Key Metrics Dashboard

Metric	Value	Assessment
Current Price	CHF 894.50	Near all-time high (CHF 975)
P/E (TTM)	64.4x	Extremely elevated
P/E (Forward)	53.7x	Still very high
P/B Ratio	18.9x	Extreme premium
EPS (TTM)	CHF 13.89	Strong growth (+16.3% YoY)
Book Value/Share	CHF 47.21
Dividend Yield	1.04%	CHF 9.50 (2025)
ROE (TTM)	32.4%	Exceptional
ROIC (TTM)	36.5%	World-class
Debt/Equity	0.04	Virtually debt-free
FCF Yield	1.1%	Very low
EV/EBITDA	45.0x	Extreme premium

Decision

WAIT -- Belimo is a world-class compounder experiencing genuine business acceleration (data centers, building renovation, energy efficiency), but the valuation demands 15%+ earnings growth sustained for 15+ years to justify the current price. The margin of safety is deeply negative. Recommend waiting for a 40%+ correction before initiating a position.

Phase 0: Opportunity Identification

Why Does This Opportunity Exist?

Short Answer: It doesn't. This is a premium-quality company trading at a premium valuation that accurately reflects its quality. In fact, the stock has appreciated 15% since our December 2025 analysis (CHF 780.50 to CHF 894.50), moving further from intrinsic value.

Opportunity Source	Present?	Notes
Forced selling	No	Widely held by institutions (47%) and Linsi foundation (19.5%)
Complexity/stigma	No	Simple, understandable business -- makes HVAC control devices
Institutional constraints	No	CHF 11B market cap, liquid Swiss blue chip
Temporary operational problem	No	Record revenues, expanding margins, accelerating growth
Market overreaction	No	Stock near all-time highs
Neglect	No	Well-followed Swiss/European industrial

Conclusion: The current price reflects the market's accurate recognition of Belimo's quality and accelerating growth trajectory. There is no mispricing at these levels. The H1 2025 results (20.6% revenue growth, 22.8% EBIT margin) have, if anything, made the stock more expensive as earnings catch-up remains insufficient to close the valuation gap.

Phase 1: Risk Analysis (Inversion Thinking)

"All I want to know is where I'm going to die, so I'll never go there." - Munger

How Could This Investment Lose 50%+ Permanently?

Valuation Compression (Most Likely): At P/E 64x, if the market re-rates Belimo to P/E 30x (still premium for quality industrials), the stock would fall 53% to CHF 417. This requires zero deterioration in the business itself. Microsoft traded at 70x in 1999 and 12x in 2012 -- same moat, same quality, vastly different prices.
Data Center Cycle Peaks: The Americas (now 50% of H1 2025 sales, up from 46% in FY2024) grew 30.1% in H1 2025, driven largely by data center cooling. Data center sales grew 50%+ YoY. If AI infrastructure investment cycles downward (as telecom did in 2001-2003), Belimo could see a meaningful revenue air pocket.
Chinese Competitor Emergence: Belimo has ~21% global market share in HVAC actuators. Well-funded Chinese manufacturers could eventually commoditize the mid-tier segment and gradually move upmarket, compressing margins over a 5-10 year horizon.
Swiss Franc Appreciation: Belimo reports in CHF but earns globally. The CHF has appreciated relentlessly. In H1 2025, revenue grew 20.6% in local currencies but 18.6% in CHF. A further 15-20% CHF appreciation would hit both earnings and competitive positioning.
Concentration Risk in Americas: The Americas now represent 50% of revenue (up from 39% five years ago), increasingly dependent on data center and reshoring tailwinds. Geographic concentration combined with cyclical exposure creates vulnerability.
Insider Selling / Foundation Disposition: The Linsi Foundation holds 19.5%. Any significant reduction would pressure the stock and signal changing long-term commitment.

Risk Quantification

Risk	Probability (5yr)	Impact	Expected Loss
Valuation compression to P/E 30x	50%	-53%	-27%
Data center cycle slowdown (-25% Americas)	30%	-30%	-9%
Chinese competition emerges	20%	-35%	-7%
CHF appreciation 20%	40%	-15%	-6%
Americas concentration + recession	25%	-25%	-6%

Aggregate Risk-Weighted Downside: -55%

Bear Case Summary (3 Sentences)

Belimo trades at 64x trailing earnings for a business that, despite accelerating to 20% revenue growth, has historically grown earnings at 14% CAGR. Even maintaining current excellence, if the P/E multiple contracts to 30x (still premium for industrials), investors lose 53%. The data center boom driving Americas' explosive growth is cyclical, and the stock's biggest risk is simply the astronomical expectations embedded in its price.

Pre-Defined Sell Triggers

ROIC falls below 20% for two consecutive years
Loss of market leadership in HVAC actuators (share falls below 15%)
Management makes dilutive acquisition paying >15x EBITDA
Insider selling exceeds CHF 50M in any 12-month period
EBIT margin declines below 16% for two consecutive years

Phase 2: Financial Analysis

5-Year Financial Summary

CHF millions	2024	2023	2022	2021	2020	5Y CAGR
Net Sales	943.9	858.8	846.9	765.3	661.2	9.3%
Gross Profit	580.3	520.0	507.2	458.5	394.6	10.1%
EBIT	181.1	152.5	152.4	145.4	106.9	14.1%
EBITDA	208.4	178.5	178.3	169.5	129.5	12.6%
Net Income	146.8	137.0	122.8	115.7	86.7	14.1%
FCF	136.1	118.6	70.2	114.1	102.9	7.2%
Shareholders' Equity	580.7	530.5	521.8	511.3	489.3	4.4%

H1 2025 Acceleration (Critical Update)

Metric	H1 2025	H1 2024	Growth
Net Sales	CHF 561.5M	CHF 473.5M	+18.6% (20.6% LC)
EBIT	CHF 128.1M	CHF 93.0M	+37.7%
EBIT Margin	22.8%	19.6%	+320 bps
Net Income	CHF 101.3M	CHF 77.2M	+31.2%
EPS	CHF 8.23	CHF 6.28	+31.1%

Regional Breakdown (H1 2025):

Americas: CHF 280.0M (50% of total), +30.1% in local currencies
EMEA: CHF 216.3M (39%), +9.9% in local currencies
Asia Pacific: CHF 65.3M (12%), +21.3% in local currencies

Product Breakdown (H1 2025):

Damper Actuators: CHF 251.8M (45%), +18.1% in local currencies
Control Valves: CHF 284.1M (51%), +23.3% in local currencies
Sensors & Meters: CHF 25.6M (5%), +16.3% in local currencies

Data Center Sales: Rising 50%+ YoY, becoming a major strategic pillar

Profitability Metrics

Metric	2024	2023	2022	2021	2020	H1 2025
Gross Margin	61.5%	60.6%	59.9%	59.9%	59.7%	~62% est
EBIT Margin	19.2%	17.8%	18.0%	19.0%	16.2%	22.8%
Net Margin	15.5%	15.9%	14.5%	15.1%	13.1%	18.0%
ROE	26.4%	26.0%	23.8%	23.1%	17.4%	32.4% (TTM)
ROIC	25.7%	26.6%	24.9%	26.0%	24.7%	36.5% (TTM)

DuPont ROE Decomposition (TTM)

ROE = Net Margin x Asset Turnover x Equity Multiplier
32.4% = 16.6% x 1.35 x 1.44

Where:
- Net Margin: 170.8 / 1,031.9 = 16.6%
- Asset Turnover: 1,031.9 / 763.7 = 1.35x
- Equity Multiplier: 763.7 / 580.7 = 1.32x

Note: Calculated using FY2024 balance sheet. H1 2025 balance sheet
would show equity ratio of 71.9% (equity multiplier 1.39x)

Assessment: The extraordinarily high ROE is driven almost entirely by exceptional margins, NOT leverage. This is the hallmark of a moat-protected business. The equity multiplier of 1.32-1.39x reflects almost zero financial leverage, meaning Belimo's returns are genuinely earned through operational excellence.

Owner Earnings Calculation (TTM)

Owner Earnings = Net Income + D&A - Maintenance CapEx - Delta Working Capital

Net Income:                 CHF 170.8M (TTM)
+ Depreciation/Amort:       CHF  35.0M (estimated TTM)
- Maintenance CapEx:        CHF -35.0M (estimated ~50% of total capex)
- Delta Working Capital:    CHF -15.0M (estimated, rising with sales)
= Owner Earnings:           CHF ~155.8M

Owner Earnings per Share = 155.8M / 12.3M = CHF 12.67

Valuation Trinity

1. Liquidation Value (Floor)

Net Current Assets = Current Assets - Total Liabilities
                   = 444.9M - 183.0M = CHF 261.9M
NCAV per Share = 261.9M / 12.3M = CHF 21.30

Current Price = CHF 894.50
Premium to NCAV = 4,100%

Assessment: Liquidation analysis is meaningless for a high-quality operating business. Included for completeness only.

2. DCF Valuation (Conservative)

Assumptions:

Owner Earnings (Base): CHF 156M
Growth Rate Years 1-5: 12% (reflecting H1 2025 acceleration)
Growth Rate Years 6-10: 7%
Terminal Growth: 2.5%
Discount Rate: 9%

Year | Owner Earnings | PV Factor | Present Value
1    | 174.7         | 0.917     | 160.2
2    | 195.7         | 0.842     | 164.8
3    | 219.1         | 0.772     | 169.1
4    | 245.4         | 0.708     | 173.8
5    | 274.9         | 0.650     | 178.7
6    | 294.1         | 0.596     | 175.3
7    | 314.7         | 0.547     | 172.1
8    | 336.7         | 0.502     | 169.0
9    | 360.3         | 0.460     | 165.7
10   | 385.5         | 0.422     | 162.7

Sum of PV (Years 1-10): CHF 1,691M

Terminal Value = 385.5 x 1.025 / (0.09 - 0.025) = CHF 6,082M
PV of Terminal = 6,082 x 0.422 = CHF 2,567M

Total Intrinsic Value = 1,691 + 2,567 = CHF 4,258M
Per Share = CHF 346

Margin of Safety at CHF 894.50 = -158% (DEEPLY OVERVALUED)

3. Optimistic DCF (Giving Credit for Acceleration)

Assumptions:

Owner Earnings (Base): CHF 156M
Growth Rate Years 1-5: 15% (continued data center boom)
Growth Rate Years 6-10: 8%
Terminal Growth: 3%
Discount Rate: 9%

Total Intrinsic Value = CHF 5,890M
Per Share = CHF 479

Margin of Safety at CHF 894.50 = -87% (STILL OVERVALUED)

Even with aggressive assumptions reflecting H1 2025 acceleration, the stock remains deeply overvalued.

4. Private Market Value

Recent HVAC/building automation M&A transactions:

Company	EV/EBITDA	EV/Revenue
Carrier/Toshiba HVAC	12x	2.0x
Johnson Controls spinoffs	14x	2.5x
Assa Abloy acquisitions	15x	3.0x
Premium niche leader max	20x	4.0x

Belimo Current Valuation:

EV ~ CHF 10.9B (Market Cap + Debt - Cash)
EV/EBITDA (TTM ~245M) = 44.5x
EV/Revenue (TTM ~1,032M) = 10.6x

At aggressive premium M&A multiple of 20x EBITDA:

Implied Value = 245 x 20 = CHF 4,900M
Per Share = CHF 398

Assessment: Even at the most aggressive private equity prices ever paid for HVAC businesses, Belimo is worth approximately CHF 400/share -- less than half the current price.

Graham Number

Graham Number = sqrt(22.5 x EPS x BVPS)
             = sqrt(22.5 x 13.89 x 47.21)
             = sqrt(14,756)
             = CHF 121.48

Current Price / Graham Number = 894.50 / 121.48 = 7.4x

Valuation Summary

Method	Value/Share	vs Current Price	MOS
Graham Number	CHF 121	-86%	-637%
NCAV	CHF 21	-98%	-4,160%
DCF (Conservative, 12% growth)	CHF 346	-61%	-158%
DCF (Optimistic, 15% growth)	CHF 479	-46%	-87%
Private Market (20x EBITDA)	CHF 398	-55%	-125%
Owner Earnings x 15	CHF 190	-79%	-371%
Owner Earnings x 25	CHF 317	-65%	-182%

Weighted Intrinsic Value Estimate: CHF 350 (up from CHF 270 in Dec 2025, reflecting earnings acceleration) Required Buy Price (30% MOS): CHF 245 Current Price: CHF 894.50 Implied Margin of Safety: -156%

Phase 3: Moat Analysis

Moat Sources Identified

1. Market Leadership & Niche Dominance (STRONG)

Evidence: ~~21% global market share in HVAC actuators, making Belimo the clear #1 ahead of Honeywell (~~17%), Johnson Controls, and Siemens
Measurement: 50+ years of continuous market leadership in a specialist niche
Duration: Decades of accumulated expertise, customer trust, and application knowledge
Key Insight: Belimo ONLY makes HVAC field devices. Competitors like Honeywell and Siemens treat this as one small division among many. Belimo's singular focus creates deeper expertise and faster innovation cycles.

2. Product Quality, Innovation & R&D (STRONG)

Evidence: CHF 72.9M (7.7% of FY2024 sales) invested in R&D annually; numerous patents; industry-first products like the Belimo Energy Valve
Measurement: New product introductions consistently command premium pricing; RetroFIT+ program for building renovations; liquid cooling for data centers
Duration: Continuous investment since 1975; competitors cannot match 50 years of accumulated know-how
H1 2025 Update: Data center cooling products growing 50%+ YoY validates innovation pipeline

3. Customer Switching Costs (STRONG)

Evidence: Products installed in commercial buildings for 15-25 year lifespans; 44% of sales to OEMs who design-in Belimo products; 56% to contractors who specify Belimo based on reliability
Measurement: Replacing actuators and control valves requires building downtime, commissioning, and recalibration -- significant switching costs for building managers
Duration: Each installation creates a multi-decade relationship and replacement cycle
Key Insight: HVAC actuators are a small fraction of total building cost but critical to performance. This "low cost, high criticality" position is ideal for maintaining pricing power.

4. Global Distribution Infrastructure (MODERATE-STRONG)

Evidence: 2,361 FTEs across 3 major regions; 8 customization centers globally; 90.5% on-time delivery rate
Measurement: Presence in all major markets with local technical support and rapid delivery
Duration: Replicating global HVAC distribution takes years of investment and relationship building

5. Regulatory Tailwinds as Moat Reinforcement (MODERATE)

Evidence: Building energy efficiency regulations worldwide (EU Green Deal, US Inflation Reduction Act, global net-zero commitments) drive demand for precisely-controlled HVAC systems
Measurement: Belimo's products directly enable energy optimization; RetroFIT+ addresses the massive building renovation opportunity
Duration: Regulatory tailwinds are structural and strengthening

Moat Durability Assessment

Threat	Severity	Timeline	Mitigation
Chinese competitors	3/5	5-10 years	Maintain quality/innovation gap; deepen OEM relationships
Technology disruption	2/5	10+ years	HVAC control fundamentally electromechanical; IoT adds value, doesn't replace
Customer power shift	2/5	Ongoing	Diversified customer base (no customer >5% of sales)
Commoditization	2/5	10+ years	Continue R&D investment; deepen technical moat via data/sensors
Big Tech entry (smart buildings)	2/5	5-10 years	Google/Apple don't make actuators; Belimo provides the physical layer

Key Question: Will this moat be wider or narrower in 10 years?

Assessment: WIDER

Three structural factors are widening Belimo's moat:

Data center growth creates new, high-specification applications where quality and reliability are non-negotiable
Building renovation requirements (energy efficiency regulation) favor the incumbent with the deepest application expertise
IoT/connectivity adds software value on top of hardware, deepening the installed base advantage

Moat Score: 9/10

Belimo possesses one of the most durable competitive moats in European industrials: niche dominance + switching costs + continuous innovation + regulatory tailwinds. The moat is widening.

Phase 4: Management & Incentive Analysis

Ownership Structure

Shareholder	Ownership	Notes
U.W. Linsi Foundation	19.54%	Founder-linked anchor; long-term holder since founding in 1975
UBS Group	5.56%	Institutional
BlackRock	5.18%	Institutional
Capital Group	4.99%	Institutional
Public / Other	~65%	Broad institutional + retail

Assessment: The 19.5% Linsi Foundation stake is a significant positive for long-term alignment. Unlike a typical Swiss blue chip with diffuse ownership, Belimo has an anchor shareholder with a 50-year horizon.

CEO Profile

Lars van der Haegen (CEO since July 2015)

Tenure: 10.5 years as CEO
Background: Internal promotion; previously held multiple senior roles at Belimo
Total Compensation: ~CHF 1.4M/year (39.2% salary, 60.8% performance-based)
Insider ownership: ~~0.03% directly; insiders collectively own ~CHF 480M worth of shares (~~15% effective exposure including foundation-linked holdings)

Assessment: Long-tenured, internally promoted CEO. Compensation structure is performance-weighted. Not an owner-operator in the Buffett sense, but the Linsi Foundation provides generational alignment.

Capital Allocation Track Record

Use of Capital (5Y)	Total	Assessment
R&D Investment	~CHF 350M (7-8% of sales)	Industry-leading; drives innovation moat
Dividends	~CHF 490M	Consistent, growing (7.50 to 9.50 CHF/share)
CapEx	~CHF 200M	Capacity expansion + modernization
Buybacks	~CHF 20M	Minimal (offset dilution only)
M&A	~CHF 0	Pure organic growth

Assessment: Capital allocation is conservative, disciplined, and appropriate for a quality compounder. Management avoids dilutive M&A, maintains a net cash position, and reinvests heavily in R&D. The organic-only growth strategy is both a strength (no acquisition risk) and a limitation (growth constrained to addressable market expansion).

Management Score: 8/10

Stable leadership, founder-family anchor, conservative capital allocation, no red flags. The only knock is that management is not aggressively buying back shares at any price (though at 64x P/E, they shouldn't be).

Phase 5: Decision Synthesis

Buffett/Munger Quality Checklist

Criterion	Pass?	Notes
Simple, understandable business	PASS	Makes HVAC actuators, valves, sensors
ROE consistently >15%	PASS	17-32% over 5 years, currently 32%
Identifiable moat	PASS	Market leader, switching costs, innovation, regulation
Consistent free cash flow	PASS	CHF 70-136M annually; FCF never negative
Management skin in game	PASS	19.5% foundation stake; CEO internally promoted
Manageable debt (D/E <0.5)	PASS	D/E 0.04 -- virtually debt-free
Profitable 10+ years	PASS	50-year unbroken profit history

Quality Score: 10/10 -- Exceptional Business

Graham Defensive Criteria

Criterion	Test	Result
Adequate Size	Sales >$100M	PASS: CHF 944M (FY2024), CHF 1,032M TTM
Strong Financial Condition	Current Ratio >2x	PASS: 2.38x
Earnings Stability	Positive 10 years	PASS: 50 years
Dividend Record	20+ years	PASS: Continuous dividends
Earnings Growth	>33% over 10 years	PASS: ~120% EPS growth over 10 years
Moderate P/E	<15 on 3yr avg	FAIL: 64x TTM P/E
Moderate P/B	<1.5 or PExPB <22.5	FAIL: 18.9x P/B

Valuation: FAILS Graham criteria spectacularly

Megatrend Resilience Score

Megatrend	Score	Notes
AI/Data Centers	+3	Direct beneficiary; data center sales +50% YoY; liquid cooling
Energy Transition	+2	Products improve building efficiency; RetroFIT+ program
Demographics/Aging	+1	Healthcare/senior facilities are key markets
Europe Degrowth	0	39% EMEA exposure, but shifting toward Americas
China Tech Competition	-1	Potential future competitive threat in actuators
Fiscal Crisis	0	Neutral; buildings still need HVAC
American Protectionism	+1	Major US operations; "reshoring" benefits

Total: +6 (Tier 1 - Strong Beneficiary)

Updated from Tier 2 to Tier 1 based on data center acceleration and Americas share growth to 50%.

Position Sizing Calculation

Position Size = Base x (MOS/Target) x (Quality/100) x (1-Risk) x Catalyst
             = 3% x (0/30%) x (100/100) x (1-0.3) x 0.7
             = 0%

Where:
- Base Allocation: 3% (exceptional quality company)
- Margin of Safety: 0% (actually -156%)
- Quality Score: 100% (10/10)
- Risk Score: 30% (valuation compression risk)
- Catalyst Multiplier: 0.7 (no catalyst for re-rating lower)

Recommended Position: 0% until significant pullback

Expected Return Probability Tree

Scenario	Probability	5Y Return	Weighted
Bull (P/E stays 55+, EPS +15%/yr)	15%	+56%	+8%
Growth (P/E compresses to 40, EPS +12%/yr)	30%	-5%	-2%
Base (P/E compresses to 30, EPS +8%/yr)	35%	-40%	-14%
Bear (P/E compresses to 20, EPS +5%/yr)	15%	-62%	-9%
Disaster (earnings decline, P/E 15)	5%	-78%	-4%

Expected 5-Year Return: -21%

Note: Even with the H1 2025 acceleration factored into the bull case, the expected return is negative due to the extreme starting valuation.

Final Recommendation

+---------------------------------------------------------------+
|                     INVESTMENT RECOMMENDATION                   |
+---------------------------------------------------------------+
| Company: Belimo Holding AG          Ticker: BEAN.SW             |
| Current Price: CHF 894.50           Date: February 21, 2026     |
+---------------------------------------------------------------+
| VALUATION SUMMARY                                               |
| +-------------------------+-------------+---------------------+ |
| | Method                  | Value/Share | vs Current Price    | |
| +-------------------------+-------------+---------------------+ |
| | Graham Number           | CHF 121     | -86% (overvalued)   | |
| | DCF (Conservative)      | CHF 346     | -61% (overvalued)   | |
| | DCF (Optimistic)        | CHF 479     | -46% (overvalued)   | |
| | Private Market (20x)    | CHF 398     | -55% (overvalued)   | |
| | Owner Earnings x 25     | CHF 317     | -65% (overvalued)   | |
| +-------------------------+-------------+---------------------+ |
|                                                                 |
| INTRINSIC VALUE ESTIMATE: CHF 350 (weighted average)            |
| MARGIN OF SAFETY: -156% (DEEPLY OVERVALUED)                     |
+---------------------------------------------------------------+
| RECOMMENDATION:  [ ] BUY  [ ] HOLD  [ ] SELL  [X] WAIT         |
+---------------------------------------------------------------+
| STRONG BUY PRICE:        CHF 245 (30% below IV)                |
| ACCUMULATE PRICE:        CHF 280 (20% below IV)                |
| FAIR VALUE:              CHF 350                                |
| CURRENT PRICE:           CHF 894.50 (+156% PREMIUM)             |
+---------------------------------------------------------------+
| POSITION SIZE: 0% until pullback                                |
| QUALITY SCORE: 10/10 (Exceptional business)                     |
| MOAT SCORE: 9/10 (Widening)                                    |
| PRIMARY RISK: Valuation compression -- no margin of safety      |
| SELL TRIGGER: N/A (no position recommended)                     |
+---------------------------------------------------------------+

The Final Word

Belimo is an exceptional business that keeps getting better. H1 2025 demonstrated genuine acceleration: 20.6% revenue growth, EBIT margin expanding to 22.8%, data center sales surging 50%+, and the Americas segment -- now 50% of the business -- growing 30%. TTM revenue has crossed the CHF 1 billion milestone. The moat is widening.

But the price has moved even faster than the business.

Since our December 2025 analysis at CHF 780.50, the stock has risen 15% to CHF 894.50 while fair value has only increased from CHF 270 to CHF 350 (reflecting higher growth assumptions). The valuation gap has actually widened. At 64x trailing earnings, Belimo remains priced for perfection extended across decades.

The Munger Test: "If this dropped 50% tomorrow, would I buy more or panic?"

At CHF 450, the answer would be enthusiastic buying. At CHF 350, it would be aggressive accumulation. At CHF 894, it is patience.

Recommended Action:

Keep BEAN.SW on watchlist with highest priority
Set price alerts at CHF 500 (begin research refresh), CHF 400 (serious consideration), CHF 350 (accumulate), CHF 245 (strong buy)
Monitor February 23, 2026 FY2025 earnings for continued acceleration
Do not initiate position until at least CHF 500 (-44% from current)
If business acceleration sustains (15%+ earnings growth for 3+ years), gradually revise intrinsic value upward

Monitoring Metrics

Metric	Current	Threshold	Action if Breached
EBIT Margin	22.8% (H1)	<16%	Investigate; potential moat erosion
ROIC (TTM)	36.5%	<20%	Thesis under review
Americas Growth	+30.1% (H1)	<5% for 2 quarters	Data center exposure risk
R&D % of Sales	7.7%	<6%	Innovation risk
Debt/Equity	0.04	>30%	Balance sheet deterioration
Data Center Sales Growth	+50% (H1)	Negative for 2 quarters	Cycle turning
Americas % of Total Revenue	50%	>60%	Concentration risk

Source Documents

Annual Reports 2019-2024 (PDFs downloaded to data/)
Semiannual Report 2024 (PDF downloaded to data/)
H1 2025 Results: report.belimo.com/HY25/en/
Historical Prices 2020-2025 (EODHD JSON, 1,508 records)
StockAnalysis.com: Financial statements, balance sheet, cash flow, statistics
CompaniesMarketCap.com: Historical price data
Belimo IR website: Financial summary, annual reports
Company Capital Markets Day 2024 presentation

Analysis prepared in accordance with the Investment Analysis Framework.

This analysis represents an independent first-principles assessment. No analyst reports or third-party price targets were consulted.