Kitron (Buy, TP: NOK40.00) - Limited downside risk to consensus
We have lowered our 2024e revenues by 2%, as we understand it is taking Kitron longer to free up capacity for its Defence & Aerospace (D&A) customers. However, we see limited downside risk to consensus – which is below the mid-point of the 2024 revenue guidance – and expect the stock to re-rate as the market factors in that we have reached a trough. Thus, we reiterate our BUY, but have cut our target price to NOK40 (42) on slightly lower estimates.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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