Hexagon (Buy, TP: SEK137.00) - Still at a ~30% SOTP discount
Hexagon’s stock has seen a long-awaited recovery with Björn Rosengren set to become vice chairman in 2025, which we believe acts as a quality stamp and should appeal to a broader international investor base. We see Q4e as a clearing event, as 1) an earnings momentum story is building from 5% organic sales growth YOY and 15% adj. EPS growth YOY in 2025e; 2) the planned spin-off of ‘NewCo’ (~20% of EBIT) should remove its conglomerate discount and crystallise values; and 3) the valuation remains undemanding in trough territory on an absolute and relative basis, at a ~30% discount to our SOTP and support from insider activity. We reiterate our BUY and have raised our target price to SEK137 (133).
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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