Hexagon AB Minor model adjustments
Our forecasts are broadly unchanged ahead of Hexagon’s Q2 results (due on 17 July) as we believe the strong demand recovery should continue through 2021, although easy China YOY comparables no longer provide a tailwind. As consensus has risen, we are only 1–3% above Infront consensus on 2021–2022e EBIT. With the bar set high, we believe it will become more difficult for Hexagon to come up with enough positive surprises to trigger a further re-rating, and believe the valuation already reflects the recovery taking shape. We do not consider these changes to be material and we have not changed our HOLD recommendation. We have raised our target price to SEK122 (121) based on 25x our 2022e EV/EBIT to reflect its recent 7:1 share split.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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