Hexagon AB (Hold, TP: SEK605.00) - Resilience rewarded by investors
Hexagon’s recovery in China (~15% of sales), with organic growth of 16% YOY in Q2, and easier comparables into H2 are setting the scene for brighter organic growth prospects. Low-single-digit organic growth in its software portfolio (~60% of sales) in Q2 provides earnings resilience, but we believe investors have already rewarded Hexagon for this, and after making minor estimate changes, we are broadly in line with Infront consensus 2021–2022e EBIT. Following a change of analyst, we reiterate our HOLD and SEK605 target price based on a 2022e EV/EBIT of 18.6x.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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