Hexagon AB (Buy, TP: SEK140.00) - Step in the right direction
We believe it makes sense for the new management team to improve the business profile by investing to accelerate growth and exiting low-margin contracts. We reiterate our BUY and have raised our target price to SEK140 (135), having increased our 2023–2024 adj. EBIT by 2%. We still see support from Hexagon’s hallmarks: 1) structural organic growth drivers offsetting cyclical concerns; 2) gross margin expansion reflected in adj. EBIT; and 3) attractive earnings and FCF resilience given its 2024e EV/EBIT of 17x, which has approached historical averages on a relative and an absolute basis.
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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