Cargotec (Sell, TP: EUR39.00) - Sales beat, but weak drop-through
Cargotec delivered impressive sales and order intake growth, with Hiab and Kalmar beating Q1 estimates. However, sales had a lower incremental margin, and adjusted EBIT was in line with consensus. Therefore, we do not expect a significant increase in consensus for 2018e. We see a cyclical downturn for Hiab, more than offsetting the MacGregor recovery in 2019–2020e. We forecast profitability pressure for Kalmar from reducing project workload. We reiterate SELL, and have raised our target price to EUR39 (38).
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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