Assa Abloy (Buy, TP: SEK220.00) - Bad to worse then back to great
Assa Abloy was the sector’s laggard in Q1 with poor cost control and negative outlook commentary. We expect Q2 to be very challenging but believe the company’s EBIT margin should recover to >15% as soon as demand stabilises and normal business drivers return. The valuation is supportive at a 2021e EV/EBIT of 16.2x (5% discount to its NTM 5-year average), and we reiterate our BUY. We have trimmed our target price to SEK220 (230) after lowering our 2020–2022e adj. EBIT by 4% on average (on FX and Q2e).
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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