Hexagon (Buy, TP: SEK135.00) - In-line results could be enough
Uncertainty related to the recent negative market press has continued to put pressure on valuation multiples, which are close to trough levels on absolute and relative bases. We see limited scope for consensus increases, but believe in-line Q3 results would be enough to gradually reverse the negative sentiment, while improved incremental margins, a return to double-digit EPS growth YOY (from -5% in 2023e), and better cash conversion despite cyclical headwinds in 2024e should trigger a re-rating. We reiterate our BUY and SEK135 target price.
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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