Arjo (Buy, TP: SEK60.00) - New, lower medium-term guidance
Q3 earnings were weaker than expected, and organic growth guidance for 2022 was cut from 3–5% to 0%. Arjo also hosted a CMD highlighting the targeted operational and financial developments for the coming years. The new medium-term targets are basically intact except that it now aims to reach an adj. EBITDA margin of 23% in 2025 rather than 2023. We believe the earnings trend will turn around in 2023, and reiterate our BUY, but we have cut our target price to SEK60 (70).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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