Trelleborg (Hold, TP: SEK395.00) - Sunnier skies await

Overall, Trelleborg’s Q1 was in line with our estimates and consensus, while we believe the outlook comment heading into Q2 might be on the overly cautious side. We have made limited (1% on average) estimate changes on adj. EBITA for 2024–2026e and reiterate our HOLD. We have raised our target price to SEK395 (380) and see limited upside potential for the stock.

Highlighting H2 improvement

Solid Q1 numbers, in line Q2 guidance. No underlying changes, but adding M&A means +2% on '24e EBITA. Maintain HOLD and TP at SEK 375.

No drama, limited ests revisions

Trelleborg (Hold, TP: SEK380.00) - Close to fairly valued in our view

We forecast Q1 sales of SEK8,546m (-1% organic growth YOY) and adj. EBITA of SEK1,479m. We have raised our 2024–2026e adj. EBITA by c9% on average, on the inclusion of the Baron acquisition, our more positive view on the general industrial cycle, and FX movements. We have increased our target price to SEK380 (350) based on our estimate changes and current multiples. However, on our view of limited upside potential and following incremental increases in the valuation (absolutely and relative to o...

Trelleborg (Hold, TP: SEK350.00) - Becoming less negative on 2024e

Q4 was relatively solid, with a slight beat on organic growth and margins, as well as an outlook that suggests flat YOY organic growth in Q1. In light of the report and various cyclical datapoints, we are now less negative mainly on H1 organic volumes, and we have raised our 2024–2025e adj. EBITA by c5%. As a result, we have increased our target price to SEK350 (345) but still see limited upside potential and hence reiterate our HOLD.

Trelleborg (Hold, TP: SEK345.00) - Time for a breather

We forecast Q4 sales of SEK8,561m (-1% organic growth YOY) and adj. EBITA of SEK1,440m. We have lowered our 2023–2024e adj. EBITA by c3.5% on average, largely due to recent FX movements, and slightly increased our margin estimates. We have raised our target price to SEK345 (316), owing to expanding peer multiples, and believe Trelleborg is trading close to its fair value (after gaining c38% YTD). With limited upside potential to our new target price and organic growth set to fade, we have downgr...

Decoding Alpha

Our analysis of underlying total shareholder return (TSR) drivers for Swedish Industrial companies reveals that high returns are not synonymous with high valuations. Investors tend to overpay for ‘growth’, while cash returns such as dividends and buybacks are typically deeply discounted. We believe Autoliv, Alfa Laval and Hexagon offer the most long-term TSR potential (13–14% annualised), with SKF and Trelleborg at the other end of the spectrum (8–9%), while also concluding that several stocks l...

Trelleborg (Buy, TP: SEK316.00) - Another undramatic quarter

Overall, the Q3 results were in line with consensus and our expectations, as was the Q4 market outlook. We have made limited estimate changes, and reiterate our BUY and SEK316 target price.

Trelleborg (Buy, TP: SEK316.00) - Muted outlook comment expected

Muted outlook comment expected We forecast Q3 sales of SEK8,627m, with -1.2% organic growth YOY, and adj. EBITA of SEK1,469m. We have trimmed our 2023–2024e organic growth and margin, but have raised adj. EBITA in the period, due to recent FX movements. We reiterate our BUY and SEK316 target price ahead of the Q3 results due at 07:45 CET on 26 October.

Northern Lights

Trelleborg (Buy, TP: SEK316.00) - Sticking to the script

Overall, Q2 was in line with our expectations. We have adjusted our model and trimmed our target price to SEK316 (320) mainly due to updated FX. We continue to see positive risk/reward in the shares. Trelleborg offers a net cash position, buybacks and a too-large valuation discount to Nordic Capital Goods, in our view. We reiterate our BUY.

Northern Lights

Trelleborg (Buy, TP: SEK320.00) - Attractive valuation and exposure

We forecast Q2 sales of SEK8,855m, with 3.3% organic growth YOY, and adj. EBIT of SEK1,374m, with Sealing’s margins likely to reflect ongoing investments and the Minnesota integration. We have cut our 2023–2025e organic growth and margin estimates somewhat, only partly offset at adj. EBIT level by recent FX movements. However, we reiterate our BUY and SEK320 target price.

Trelleborg AB: 1 director

A director at Trelleborg AB maiden bought 4,000 shares at 254.960SEK and the significance rating of the trade was 59/100. Is that information sufficient for you to make an investment decision? This report gives details of those trades and adds context and analysis to them such that you can judge whether these trading decisions are ones worth following. Included in the report is a detailed share price chart which plots discretionary trades by all the company's directors over the last two years ...

Trelleborg (Buy, TP: SEK320.00) - In-line results, limited changes

The Q1 results were in line with our forecasts and consensus (c1% above on adj. EBIT), and the new outlook also seemed in line with expectations overall. We have made limited estimate changes, raising our adj. EBIT by c1% for 2023–2025e on average. We reiterate our BUY and SEK320 target price. At a 2023e EV/EBIT of 13.5x, Trelleborg is trading at what we view as an unwarranted discount to Swedish Capital Goods (14.6x).

Northern Lights

Trelleborg (Buy, TP: SEK320.00) - Limited changes ahead of results

We estimate Q1 sales of SEK8,843m and adj. EBIT of SEK1,392m. Our 2023–2025e adj. EBIT are broadly unchanged, while we have raised our EPS forecasts by c2% reflecting share buyback adjustments. As a result of these changes and our updated valuation, we have raised our target price to SEK320 (304), while we reiterate our BUY.

Northern Lights

Still going strong

Although reported EU taxonomy alignment for the sector is low, we have identified which companies screen best and could benefit from attracting ESG capital. We still favour China, mining, energy and aftermarket exposure, and see upside potential to consensus estimates, but view overall risk/reward as neutral on elevated valuation.

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