Assa Abloy (Buy, TP: SEK285.00) - A trinity for outperformance
We see three main reasons for Assa Abloy to outperform the sector in 2023: 1) overly conservative consensus margin expectations; 2) the shares gaining traction from foreign investors as the ABI troughs; and 3) an attractive valuation at a 2023e EV/EBIT of <15x. We estimate 16% YOY adj. EBIT growth in 2023 (versus flat for sector median) and see potential upside towards SEK400 if the company reaches its 2026 targets. We reiterate our BUY and have raised our target price to SEK285 (260).ASSA ABLOY provides a range of door opening solutions. Co. is organized into five divisions. Europe, Middle East and Africa division, Americas (North and South America) division and Asia Pacific (Asia, Australia and New Zealand) division manufacture and sell mechanical and electromechanical locks, security doors and hardware in their respective geographical markets. Global Technologies division operates worldwide in the product areas of access control systems, secure card issuance, identification technology and hotel locks. Entrance Systems division is a global supplier of entrance automation products and service.
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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