Assa Abloy (Buy, TP: SEK325.00) - On a HHI
We reiterate our BUY and have raised our target price to SEK325 (315), having increased our 2023–2025e adj. EBIT by 2.8–1.6% after the Q1 results. We view the court ruling on Assa Abloy’s proposed acquisition of HHI in Q2 as a ‘win-win’ that offers 5–10% potential upside to the stock if the deal is approved and 10–20% if it is blocked. Assa Abloy remains our sector top pick and has the most defensive profile in the Swedish industrial sector, yet is trading at a decade-low relative valuation.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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