Hexpol (Buy, TP: SEK96.00) - Upgraded to BUY
We forecast Q1 sales of SEK5,288m, and adj. EBIT of SEK811m, c5% below consensus. As usual, we do not expect forward-looking commentary from management. We have cut our 2025–2027e adj. EBIT by c8% on average due to FX and slightly negative underlying estimate revisions. However, we see a positive risk/reward (c25% discount to Swedish industrials versus c5% historically), and attractive upside potential to our new, reduced SEK96 (108) target price, prompting us to upgrade to BUY (HOLD).Hexpol is organized in two business areas: HEXPOL Compounding and HEXPOL Engineered Products. HEXPOL Compounding is engaged as a supplier in the development and manufacture of polymer compounds. HEXPOL Compounding focuses primarily on two key segments of the polymer market: rubber compounding and thermoplastic elastomer compounding. HEXPOL Engineered Products is engaged as a supplier of products such as gaskets for plate heat exchangers and wheels for the forklift industry. The business area also provides rubber profiles, mainly for the construction and engineering industries.
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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