HMS Networks (Sell, TP: SEK450.00) - Challenging quarter ahead
Ahead of the Q1 results (due at 07:30 CET on 16 April), we have reduced our 2024–2025e EBIT by 3–2% on the sluggish market recovery, echoed by automation peers and leading indicators. We await more disclosure next week before including the Red Lion acquisition in our model (consolidated as of April; does not affect Q1 results). We reiterate our SELL and SEK450 target price, as we are 6% below Visible Alpha consensus on Q1e EBIT. While we believe investors are likely willing to look beyond a few tough quarters, weak Q1e orders and backlog could further delay the recovery story.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.
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