While Crayon beat our headline forecasts for Q2, we have made limited estimate changes and continue to see a risk of disappointment ahead. We see growth headwinds and payables as a particular swing factor in Q3, the latter which was the key driver of cash flow in Q2 and likely to be the main factor for cash flow in Q3 as well. Accordingly, we reiterate our SELL and NOK90 target price.
Heading into Crayon’s most important quarter, there are mixed messages about whether slower headcount momentum in some businesses will drive operating leverage or slow sales and shrink gross margins. Either way, market sentiment looks upbeat and consensus has concluded on the upside, in our view implying an unfavourable risk/reward ahead of the Q2 report. We reiterate our SELL but have raised our target price to NOK90 (75).
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