Arjo (Buy, TP: SEK60.00) - End of 2023 bodes well for 2024
Q4 earnings were stronger than expected, with the drivers boding well for the start of 2024 even though the guidance remains on the conservative side, in our view. The beat was driven by a stronger than expected gross margin, and we believe the underlying effects should carry into 2024. We have raised our 2024–2026 estimates, mainly for the gross margin. We reiterate our BUY and have increased our target price to SEK60 (55).Co. is the parent company of a group engaged in the development, manufacture, marketing, and sale of hygiene systems and patient handling equipment. Co.'s operations are divided into three divisions. The Hygiene Systems division is engaged in the manufacture of bathing systems, sit-baths, shower cabinets, shower trolleys, and integrating hygiene lifters. The Patient-Handling Products division is engaged in the manufacture of equipment for lifting and transferring elderly and disabled people. The Other Products division is engaged in the provision of installation and maintenance service; the sale of spare parts; and the production of therapy tanks, pool lifts, hydrotherapy pools, bath oils, shampoos, and disinfecting agents.
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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