Kitron (Buy, TP: NOK40.00) - Facing temporary margin headwind
We have cut our 2025e EBIT by 7%, and are thus 6% below consensus, as we expect a temporary headwind to margins in the Nordics. However, we are 6% above on 2026e EBIT, as we forecast a margin recovery due to sales growth and improvements in some of its operating challenges in the Nordics. Thus, we reiterate our BUY and NOK40 target price.Kitron and its subsidiaries comprise one of Scandinavia's enterprises in the development, industrialisation and manufacturing of electronics for the data/telecom, defence/marine, medical equipment and industry segments. The group has operations in Norway, Sweden, Lithuania and China. Co.'s activities are characterised by complex manufacturing processes and expertise. Co. has chosen to focus its sales and marketing activities within the Data/Telecom, Defence/Marine, Medical equipment and Industry market segments. Customers typically provide products or equipment for professional use. Co. is a typical high mix low volume Electronic Manufacturing Services company.
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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