Husqvarna (Sell, TP: SEK65.00) - Weak Q4e
We expect weak demand to weigh on sales and EBIT in Q4, with similar market dynamics as in Q3 and consumers still under pressure. We forecast Q4 sales growth of -17% YOY on organic growth of -16% YOY due to lower volumes, and negative mix effects. These factors should also weigh on profitability; we estimate a Q4 adj. EBIT margin of -4%. We reiterate our SELL but have raised our target price to SEK65 (60) on a marginally more positive outlook.Husqvarna AB produces outdoor power products. Products include: robotic lawn mowers, chainsaws, handheld petrol-powered products such as clearing saws and trimmers, garden tractors, and lawn mowers. Co. is also engaged in providing consumer watering products, cutting equipment and diamond tools for the construction and stone industries. Co.'s products and solutions are sold via dealers and retailers. Co. has three business areas: Europe & Asia/Pacific and Americas, which provide forest, park and garden products to dealers and retailers in Europe and Asia/Pacific, and in North and Latin America, respectively; and Construction, which provides light construction products and diamond tools.
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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