Focus on Q4 opportunity
Recent quarterly results have surprised on growth but lacked the margin expansion that should follow strong Technical Solutions growth. We still see the key risk to the transformation case as time to maturity; and with Securitas having pushed the margin recovery story to Q4e, we see Q3e (results due at 13.00 CET on 27 October) as a non-event. But with Technology Solutions’ penetration likely to hit 21% by Q4e, we still believe we are nearing the inflection point for when earnings leverage and revaluation potential appear. We reiterate our BUY recommendation and SEK165 target price.Securitas is engaged in integrated security solutions. Co.'s main service offering categories are specialized guarding, mobile security services, monitoring, technical solutions and consulting and investigation services. Co. operates in 52 countries throughout North America, Europe, Latin America, the Middle East, Asia and Africa. Co. is organized into three business segments: Security Services North America, Security Services Europe and Security Services Ibero-America. In addition to the three business segments, Co. conducts guarding operations in the Middle East, Asia and Africa.
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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