Hexagon Composites (Hold, TP: NOK31.00) - Upside potential looks played out
We expect a somewhat faster margin recovery in Agility and have raised our 2023e EBITDA by 8%. With the stock up almost 50% over the past month adjusted for the special dividend in kind of 25% of the Hexagon Purus market cap, we believe the upside potential has been played out and have downgraded to HOLD (BUY), We have raised our target price to NOK31 (30) after rolling our valuation to 2024e and increasing multiples slightly.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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