GARO (Hold, TP: SEK30.00) - Cash flow easing concerns

Q4 was in line with the profit warning on 30 January on net sales and EBIT. However, we saw a positive twist in the cash flow, as a working capital release helped pull down net debt/last 12-month EBITDA to 2.2x, limiting the near-term equity-issue risk if the situation does not get considerably worse, we believe. We reiterate our HOLD, but have nudged down our target price to SEK30 (31).

GARO (Hold, TP: SEK31.00) - Lower power in E-Mobility

The profit warning on 30 January revealed Q4 net sales 9% below our estimate and adj. EBIT of SEK-8m. We have taken a more cautious stance on 2024e E-Mobility growth and group EBIT margins, and reiterate our HOLD and SEK31 target price. The Q4 results are due on 21 February (we expect around 08:30 CET).

GARO (Hold, TP: SEK31.00) - Resetting expectations

Q3 sales were 7% below our forecast and EBIT 73% below (however on a small base) due to lower E-Mobility sales and gross margins, and a higher fixed cost base. We have reset our expectations, prompting us to cut our 2024e EBIT by 20%. We have downgraded GARO to HOLD (BUY) and cut our target price to SEK31 (60).

GARO (Buy, TP: SEK70.00) - Attractive risk/reward

While we expect the Nordic construction market slowdown to hurt GARO Electrification, we believe GARO E-Mobility returned to YOY sales growth in Q2. After a significant share-price drop YTD, we believe many negative expectations are priced in and find the risk/reward attractive. We have cut our target price to SEK70 (87) but have upgraded to BUY (HOLD).

Northern Lights

GARO - Strong quarter, markets and margins bode well

Q2 EBIT of SEK 55m (+18% vs. ABG, +25% vs. cons) ’21-’23e EBIT up 15-20%, positive on outlook 30.6x ‘22e EV/EBIT on strong market momentum

GARO - Expect another strong report

Q2 report due on 12 August at 07:30 CET We raise EBIT by ~1% for ’21e-‘23e 34x ‘21e EV/EBIT, 8% below the two-year average

Ford Equity International Rating and Forecast Report

Ford Equity International Research Reports cover 60 countries with over 30,000 stocks traded on international exchanges. A proprietary quantitative system compares each company to its peers on proven measures of business value, growth characteristics, and investor behavior. Ford's three recommendation ratings buy, hold and sell, represent each stock’s return potential relative to its own country market.. The rating reports which are generated each week, include the fundamental details behind...