Dometic (Buy, TP: SEK185.00) - No change to long-term case
We reiterate our BUY and our SEK185 target price, as the long-term case appears intact where: 1) margins could shift up on good drop-through from organic expansion; 2) M&A with accretive margins (18.9% EBITA margin versus Dometic’s 18.6%) could make the margin target conservative as we believe it includes 100bp of dilutive M&A; and 3) a SEK5.4bn M&A bankroll could add 16% to estimates and warrant a re-rating. We have fine-tuned our 2021–2022e EBIT by -1/+1% (-2% organically and 1–3% from FX), but still find the stock attractively priced at a 2022e EV/EBIT of 14.0x.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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