Assa Abloy (Sell, TP: SEK155.00) - Temporary growth lockdown
We have downgraded Assa Abloy to SELL (HOLD) and cut our target price to SEK155 (187) as its premium valuation risks being challenged by the uncertain management situation and high valuations muting M&A activity, leading to growth below historical levels. We like the shift towards digital and electromechanical solutions, but believe a 2018e EV/EBIT of 16x offers a poor risk/reward to the 2017–2019e EBIT CAGR of 6%.
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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