DnB Markets - Momentum Group (MMGR B) Alligo (Buy, TP: SEK175.00) - The snow-shovel effect in Q4e

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DnB Markets

Karl-Johan Bonnevier

EUR 441.27 For Business Accounts Only

Alligo (Buy, TP: SEK175.00) - The snow-shovel effect in Q4e

With warm winter temperatures in Q4, we see tough YOY comparables on harsher conditions in Q4 2023, affecting winter product demand and our short-term expectations. As the carryover effect is limited on our forecasts, we have raised our 2025–2027e EPS by 2–3% on recent acquisitions. We believe Alligo is well positioned for profitable growth as demand recovers and find its >10% EBITA margin target ambitious but achievable by 2026. We reiterate our BUY and SEK175 target price.

24/01/2025 1 EN

Underlying

Momentum Group

Momentum Group Ab. Momentum Group AB is a Sweden-based reseller of industrial consumables and components, as well as service and maintenance to professional end users in the industrial and construction sectors in Sweden, Norway and Finland. The Company comprises six operating areas, which are organized under two business areas: Tools & Consumables and Components & Services. The Tools & Consumables business area comprises TOOLS Sweden, TOOLS Norway, TOOLS Finland and Mercus Yrkesklader. The business has focus on the sale of tools, personal protective equipment and other consumables to the industrial and construction markets. The network consists of 120 local sales outlets in Sweden, Norway and Finland. The Components & Services business area comprises Momentum Industrial and Gigant, which focus on the sale of spare parts for production and workplace equipment mainly to customers within industrial sector.

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SE0009922305 Nasdaq Nordic Stockholm Sweden

Provider

DnB Markets

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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Analysts

Karl-Johan Bonnevier

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Q1 was tough, with still-weak market demand partly offset by still-strong gross margins and the contribution from recent acquisitions. We still see Alligo as a strong name on Nordic demand recovery, but the international turmoil has led us to delay the profitable growth scenario and an 8–10% cut to our 2025–2027e EPS. We see an industrial roll-up case and believe Alligo is well positioned for profitable growth as demand recovers. We reiterate our BUY but have cut our target price to SEK160 (175).

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Alligo (Buy, TP: SEK175.00) - Operational-gearing case for 2025

Q4 was tough, as we expected, with still-weak market demand exacerbated by the mild winter and much lower supplier volume discounts. On a positive, we expect a recovery in demand in 2025 to reverse the negative volume gearing of 2024. We see an industrial roll-up case evolving, and believe Alligo is well positioned for profitable growth as demand recovers. We reiterate our BUY and SEK175 target price.

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Sparebanken Møre (Hold, TP: NOK95.00) - Higher margin pressure and costs

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Alligo (Buy, TP: SEK175.00) - The snow-shovel effect in Q4e

Alligo (Buy, TP: SEK160.00) - Plan Z in implementation

Alligo (Buy, TP: SEK175.00) - Operational-gearing case for 2025

Kone (Hold, TP: EUR55.00) - Limited surprises

Pareto Bank (Buy, TP: NOK84.00) - Solid start to the year

Sparebanken Møre (Hold, TP: NOK95.00) - Higher margin pressure and costs

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