Physitrack (Buy, TP: SEK49.00) - Pluses still outweigh minuses
We believe that Physitrack’s 25–30% organic growth remains impressive and will likely be sustained in 2023e, albeit at a somewhat lower incremental margin due to weaker mix. We understand investor scepticism until we see evidence of 1) a trough for margin contraction and cash flow improvements on a non-adjusted basis; 2) industrial logic and cross fertilisation of its M&A strategy; 3) sustained rapid organic growth in a weaker macro environment; and 4) EBITDA margin expansion towards its medium-term 40–45% target. We have lowered our 2023–2024e adj. EBITDA by 4–3%. We reiterate our BUY but have cut our target price to SEK49 (53).
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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