Elekta (Buy, TP: SEK150.00) - Profit warning for Q2 and FY
Elekta pre-announced weaker than expected earnings for Q2 2019/2020 and lowered its full-year margin guidance to c18%, from c19% previously, although the sales guidance of 8–10% growth still stands. Cash flow disappointed, falling YOY to cSEK230m from SEK367m. We had factored in an improvement from a better operating profit and improvements in NWC. We have reduced our forecasts to reflect the new guidance, which has led us to cut our target price to SEK150 (160). However, we reiterate our BUY.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.
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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