RBC Capital Markets downgraded OC Oerlikon Corporation AG to 'sector perform' from 'outperform' on Thursday, raising its price target to CHF4.40 from CHF3.90 after the Swiss industrial coating company's shares rallied roughly 50% since November. The stock now trades at CHF4.24 on the SIX Swiss Exchange, offering only 4% upside to the new target despite strong fourth-quarter results.

Oerlikon delivered a robust fourth quarter with order intake rising 17% organically year-on-year, well above the 5% consensus expectation. The company also beat third-quarter expectations with 11% organic order growth versus the market's 3% forecast. RBC's price target combines a 50/50 blend of discounted cash flow analysis yielding CHF4.15 and multiples analysis producing CHF4.63, both applying a 20% valuation discount to the European capital goods sector.

The downgrade follows Oerlikon's announcement of a special CHF0.85 dividend, totaling approximately CHF289 million in payouts partly funded by proceeds from the CHF850 million Barmag divestment. RBC had expected only a CHF0.15 dividend, arguing the higher payout would slow deleveraging. The firm now calculates a net debt-to-adjusted EBITDA ratio of 2.8x by end-2027 versus management's 2x guidance.