Hexagon AB (Buy, TP: SEK560.00) - Another solid quarter lined up
We expect another solid quarter in Q2, with 7.3% organic growth YOY and EUR231m EBIT (0.5%-points below and 2% above consensus, respectively). We believe an accelerated recovery in PPM offers upside potential in Q2 and later in 2018, while the YOY margin boost from: 1) the cost-savings programme launched in February 2017 and 2) the high-margin MCS acquisition will start to ease in Q2. We reiterate our BUY recommendation and SEK560 target price. Results are due on 31 July.Hexagon is engaged in the provision of integrated design, measurement and visualization technologies. Co. has two segments: measurement technologies, which consist of Geosystems that captures, processes and stores position-related information, Metrology, which provides manufacturing evaluation, process qualification and final parts inspection, and Technology, which provides engineering software as well as geospatially powered solutions; and Other Operations, which focuses on the transportation industry in the car and heavy vehicle segments. The Other Operations conducts its business in the Nordic region.
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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