Positive US hospital capex outlook for H2'24

Arjo (Buy, TP: SEK58.00) - H2 likely skewed towards Q4

While we now see a slightly softer Q3 than previously, we believe Q4 could compensate for this (in line with the historical pattern). In addition, we now expect the strong SEK to have a greater negative impact on earnings. We still see underlying progress as expected and estimate 2024 organic sales growth in the upper part of the guidance of 3–5%. We reiterate our BUY and SEK58 target price.

Swedish Orphan Biovitrum (Hold, TP: SEK335.00) - Royalties and Vonjo in focus

We believe the stock market will focus on two items in the Q3 report: Beyfortus royalties and Vonjo sales. Sales of Vonjo have disappointed thus far, but growth looks set to improve. Sanofi had Beyfortus manufacturing issues last RSV season, but these seem to have been addressed, which should lead to clearly higher royalties. However, a strong share-price performance has led us to downgrade to HOLD (BUY). We reiterate our SEK335 target price.

Lyko Group (Sell, TP: SEK95.00) - Waiting for further positive signs

For Q3, we are slightly above consensus on EBIT but below on net profit. We expect Lyko’s results to be weighed down by continuously high financial costs. In our view, focus will remain on its European market, the efforts to improve its group gross margin, and the cash flow position (net debt/EBITDA of c4.4x at end-Q2). We reiterate our SELL and SEK95 target price, reflecting its stretched balance sheet and our belief that it will take time to properly balance growth and profitability.

The weekly navigator

From the past week, we highlight: 1) we hosted investor lunches with the CEOs of Svolder and Byggmästaren at our Stockholm office; 2) we met with Investor, which is continuing to execute on its M&A agenda; 3) we met with VEF, which is seeing positive momentum for fintech VCs in its core markets of Brazil and India.