Hexagon AB (Buy, TP: SEK705.00) - Positive trends set to continue
We are fairly in line with Infront consensus ahead of Hexagon’s Q3 report (due on 28 October), but remain 5% above on 2021–2022e EBIT. Hexagon’s 2022e EV/EBIT of 19x still screens as attractive relative to industrial software peers (30x), and we believe it should bridge some of this valuation gap as it demonstrates organic growth prospects beyond a cyclical recovery and FCF resilience. We have raised our target price to SEK705 (685), and reiterate our BUY.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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