Hexagon AB (Buy, TP: SEK135.00) - Attractive despite uncertainty
Despite short-term uncertainty, we believe that: 1) recent short report criticism is exaggerated, especially for organic growth; and 2) Hexagon’s cost-savings programme is another step by the new management to improve the long-term business profile. Once the short-cycle headwinds rise, we expect investors to shift focus towards Hexagon’s relative earnings resilience. We note that Hexagon’s shares outperformed the OMXS30 by 30%+ after cost-savings programmes were announced in 2017 and 2020. At a trough valuation relative to the Nordic cap goods sector, we have upgraded to BUY (HOLD), but have cut our target price to SEK135 (140).
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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