Alfa Laval (Buy, TP: SEK580.00) - Strong mix in mixed report
Q3 was mixed, with Marine order growth of 47% organically YOY (strong pumping systems) and a 190bp margin beat versus consensus in Energy, but Food & Water orders 5% below. However, outlook comments for an improved short cycle eased our concerns of a 2025 slowdown in Food & Water. We are 10–11% above consensus on 2025–2026e adj. EBITA, as we believe mix improvements in Marine should drive margins. We reiterate our BUY and have raised our target price to SEK580 (545), based on a 3–4% increase in our 2025–2026e adj. EBITA.Alfa-Laval AB is a supplier of products and solutions in the technologies of heat transfer, separation and fluid handling. Co.'s equipment is used to heat, cool, separate and transport products in industries that produce food, beverages, fuel, chemicals, pharmaceuticals, starch, sugar and ethanol. They are also used aboard vessels, in power plants, in the engineering industry, for treating sludge and wastewater, for heating and cooling, and others. Co.'s products include: air heat exchangers, plate heat exchangers, shell-and-tube heat exchangers, thermal fluid systems, boilers, decanters, belt filter presses, high-speed separators, membrane filtration, pumps and valves, and tank equipment.
DNB Markets is the investment banking arm of DNB Bank ASA and is focused primarily on the Nordic region, as well as internationally on niches such as global shipping, energy and related services, and seafood. DNB Markets offers services in FICC, Equities and Investment Banking advisory from offices in Oslo, Stockholm, London, Singapore and New York. Equity research coverage is offered on c250 Nordic companies. DNB was ranked no.2 in Extel Nordic Research 2017. The DNB Markets’ Credit and FICC Macro & FX Research teams are repeatedly highly rated by Prospera Nordic Institutional Investor Surveys.
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