Hexpol (Hold, TP: SEK102.00) - Watch out for these risks in Q3
We have lowered our Q3e organic growth by 200bp to 5% after IHS significantly cut its estimate for North American automotive production for the same quarter. In Q3, we expect a continuation of the improved pricing environment, fuelling 20bp YOY EBIT margin expansion to 16.2% (10bp above consensus, albeit on a 2% lower sales estimate). We reiterate our HOLD but have raised our target price to SEK102 (93). The Q3 results are due on 25 October.
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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