Hexagon AB (Buy, TP: SEK550.00) - Heading for the next level
Hexagon’s Q4 was its best quarter ever, as the CEO said, beating consensus on all parameters, with organic growth of 10% (consensus 5%) and adjusted EBIT 7% above. We have raised 2018–2020e by 3–4%, but believe a recovery in O&G could offer c4% further upside potential to 2018e EBIT. We expect ~6% annual organic sales growth in 2018–2020, resulting in 11% EPS CAGR. We reiterate BUY and have raised our target price to SEK550 (460).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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