Loomis (Buy, TP: SEK460.00) - US profitability stepped up further
Loomis saw strong profit margin progression in Q4, particularly in the US operation, with moderating growth in the lower-margin CIT setting up a strong mix, something we consider likely to continue. We have only tweaked our EPS forecasts (+2–3%) post-Q4. The investment case still looks solid, based on US CMS/SafePoint growth, with the 2020 European outlook also strengthening. We reiterate our BUY and SEK460 target price, with greater upside potential if its substantial ‘financial muscle’ is reinvested effectively, and the full SafePoint potential is realised.Loomis AB is a holding company. Through its subsidiaries, Co. provides solutions for cash handling in the U.S., majority parts of Europe and in Argentina. Co. provides cash in transit (CIT), cash management services (CMS) and solutions which integrate CIT with CMS. The CIT service transports cash to and from stores, banks and automated teller machines (ATMs). The CMS service counts, quality controls and packages bills and coins in Co.'s cash centers. Co. also provides solutions for retail outlets and for maintenance of ATMs, as well as analysis, forecasting and reporting of customers' cash flow. The services are targeted at banks, retailers, commercial enterprises and the public sector.
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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