Hexpol (Hold, TP: SEK90.00) - HOLDing on
We expect Hexpol to report additional opex reductions in Q4, and forecast EPS growth of 27% YOY. Our adj. EBIT is 7% above consensus. However, we believe the margin contribution from raw material tailwinds is fading, and given that the gross margin appears more cyclical than structural, we regard a discount to the historical valuation as warranted until there is more evidence that the M&A story can be reignited. We reiterate our HOLD and SEK90 target price.
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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