Hexagon AB (Buy, TP: SEK135.00) - Resilience at a modest valuation
We believe the combination of 1) structural growth exposure (automation and digital twins), 2) Hexagon’s ability to capture its gross margin expansion in EBIT, providing earnings resilience, 3) its recent consistent execution, and 4) a reasonable valuation of 18x 2024e EV/EBIT for what we view as a high-quality business put the stock in position for outperformance as the cycle worsens. We reiterate our BUY but have raised our target price to SEK135 (130).
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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