Hexagon AB (Buy, TP: SEK765.00) - Holds a strong hand into 2021e
Hexagon demonstrated solid execution in Q3, with a consensus beat on organic growth and 9% on adjusted EBIT, despite 6% FX headwinds. We are 6% above Infront consensus on 2021–2022e EBIT, as we believe Hexagon’s organic growth prospects remain under-appreciated, trading at a 2022e EV/EBIT of 20x versus industry peers at 28x. We also sensed a more positive tone on near-term M&A activity. We reiterate our BUY, while we have raised our target price to SEK765 (705).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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