Dometic (Buy, TP: SEK145.00) - Upside risk from margins and M&A
In our view, Dometic is set for a solid, multi-year end-market recovery, while we expect internal efficiency gains to drive margins. Although the 16–17% medium-term EBIT margin target includes dilutive M&A, we believe margins at the two latest bolt-ons have been in line with or above the group average, and could prompt Dometic to raise its target in the coming years. We reiterate our BUY and have raised our target price to SEK145 (130).Dometic Group AB serves the market with a range of air conditioners, refrigerators, awnings, cookers, sanitation, lightning, mobile power equipment, windows, doors and other comfort and safety products. The products are sold in approximately 100 countries and are mainly produced in wholly owned production facilities around the world.
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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