HMS Networks (Buy, TP: SEK515.00) - Focus soon to shift to 2025e
Tougher for longer end-markets usually expose flaws, but HMS’s quality characteristics are evident from its fifth consecutive margin Infront consensus beat, allowing for operating leverage as the market rebounds. Nine quarters of organic order declines suggest bounce-back potential in mid-2025, while the 13% order miss to Visible Alpha consensus sending the share price up 2% on Friday suggests investors are unlikely to become more negative. We reiterate our BUY but have cut our target price to SEK515 (525). We are 11% above consensus on 2025e EBIT and see limited balance sheet risks.HMS Networks AB (HMS) is a Sweden-based company engaged in the provision of communication technology for industrial automation. The Company provides solutions to connect industrial devices to networks and products enabling interconnection between different industrial networks. The Company's products are classified into two brands, namely Anybus and Netbiter. HMS, under the brand name Anybus, manufactures and markets intelligent communication technology for machines and electrically controlled equipment. Under the brand name Netbiter it develops and sells communication equipment that facilitates remote management through the Internet, either via the fixed telephony network or the mobile telephony network. The Company operates through numerous subsidiaries, including HMS Industrial Networks AB, IXXAT GmbH, a supplier of communication technology for industrial automation, machine manufacturing and the automotive industry, as well as eWON SA.
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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