Hexpol (Hold, TP: SEK108.00) - Seasonal headwinds
Q4 was weak overall, driven by the surprisingly soft gross margin in the quarter, which was seemingly due to seasonality/calendar effects that hit mix and costs. We maintain our cautious view on automotive manufacturing, and have become more concerned about gross margins. We have cut our adj. EBIT by c4% for 2025e, while 2026e is broadly unchanged. We reiterate our HOLD, but have lowered our target price to SEK108 (112), owing to our estimate cuts.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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