Elekta (Buy, TP: SEK105.00) - Guidance update, due to Covid-19
Elekta said this morning that Covid-19 had a negative impact on its upcoming Q4 results. The new 2019/20 guidance is for sales growth of c1% (previously 8–10%) and an EBITA margin of c16–17% (c18%). This indicates a sharp sales drop in Q4 (as 9M growth was 7%). Moreover, the mid-term guidance (up to 2022/23) was withdrawn. We believe the share price already largely reflected lowered guidance. We reiterate our BUY, but have cut our target price to SEK105 (140).Elekta AB is a human care company providing clinical solutions for treating cancer and brain disorders. Co. develops tools and treatment planning systems for radiation therapy including brachytherapy and radiosurgery, as well as workflow improving software systems across the field of cancer care. Co. has four product areas: Elekta Neuroscience, which develops solutions for the diagnosis and treatment of neurological diseases; Elekta Oncology, which develops clinical solutions for radiation therapy, imaging systems and clinical solutions for patient positioning and immobilization; Elekta Brachytherapy, which is engaged in cancer treatment based on internal radiation; and Elekta Software.
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