Hexagon (Buy, TP: SEK137.00) - Multifaceted 2025 story unfolding
After recent market volatility, we see upside potential due to: 1) a long-awaited acceleration in organic growth (with defensive traits); 2) earnings momentum translating into YOY adj. EPS growth of 17% in 2025e; 3) the ‘NewCo’ spinoff (c25% of group EBIT) crystallising values; 4) new leadership appealing to a broader international investor base; 5) strong Q4 results that encouraged bulls and de-risked the 2025e case, potentially attracting new investors; and 6) undemanding valuation, in our opinion. We reiterate our BUY, but have cut our SEK137 (145) target price, as we trimmed our 2025e EBIT by 3%.
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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