Hexagon Composites (Buy, TP: NOK40.00) - High activity expected in Q2
We expect Hexagon Composites to report strong Q2 results on high activity and double-digit margins in Agility, and are 5% above consensus on Q2e EBITDA. We have raised our 2024e EBITDA by 2% on the higher activity, are 4–6% above 2024–2025e consensus for Agility, and thus expect positive estimate revisions. We reiterate our BUY and NOK40 target price, and see the stock trading attractively at a 2025–2026e EV/EBITDA of 8.1–6.3x.Hexagon Composites is divided into three business segments. Co.'s Hexagon Ragasco segment manufactures low-pressue composite cylinders, such as cylinders for propane gas; and Co.'s Hexagon Lincoln/Hexagon Raufoss segment develops and supplies complete storage and transport systems for natural gas and hydrogen to the bus and automotive industry and for bulk transport of compressed gas. The Group's activities are divided into the following regions: Europe, North America, South-East Asia, Middle East and South America.
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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