ALK-Abello (Buy, TP: DKK165.00) - European tablet growth shifts gear

Last night, ahead of time, ALK-Abello published its Q1 results and increased its FY top-line guidance on much stronger than expected European tablet sales growth of c28% (consensus c15%). At the same time, the company announced a cost-cutting programme in connection with its ongoing strategic review, which should help it reach its c25% EBIT margin target by 2025. We reiterate our BUY and have raised our target price to DKK165 (145).

Evolution (Buy, TP: SEK1700.00) - Live buying opportunity

We reiterate our BUY and SEK1,700 target price after healthy but in-line Q1 results (Live revenue growth >25% YOY at constant FX). In our view, the weak share price despite a healthy start to the year, promising new games pipeline, high-conviction growth outlook (growth investments, e.g. recruitment), and long-awaited Live dealer contract with leading operator bet365 offers a solid buying opportunity.

ALK-Abello (Buy, TP: DKK145.00) - Set for still-strong European tablet...

We expect another strong quarter for European tablet sales in Q1, up c15% YOY, marking a third consecutive quarter with growth in the teens, which should help boost investor confidence (results due at 07:00 CET on 3 May). However, due to tough comparables for the legacy business and seasonality patterns, we expect the 2024 guidance to be maintained. We reiterate our BUY and have raised our target price to DKK145 (140).

Set for acceleration

Expansion investments weigh on Q1 margin, but great setup for solid outlook for remainder of '24e. Keep BUY — 17-14x '25e-'26e P/E and >5% FCF yield

Bet365 signing proving Evo's strength

Arjo (Buy, TP: SEK58.00) - An in-line report

The Q1 results were fairly in line with our expectations, with the main deviation higher restructuring charges. Adjusted for this, EBIT was in line. Overall, organic growth was 4.3% YOY, in line with the full-year guidance of 3–5%. Arjo also provided an update on the Randomised Controlled Trial (RCT) for Wound Express, where data should be available in mid-2025. We reiterate our BUY, but have lowered our target price to SEK58 (60).

Evolution (Buy, TP: SEK1700.00) - Continued strong start to 2024

According to our tracker, the positive trend that we identified in Q1 (stabilising YOY growth after a period of deceleration) has continued in Q2: total daily average players has grown by 10% QOQ, corresponding to >35% YOY. We believe the strong trend YTD implies upside potential to our forecasts and consensus for Q1–Q2 Live revenue growth of 6–4% QOQ. Evolution continues to widen the gap to competition and we believe stabilising Live revenue growth YOY should prompt a share price re-rating.

Evolution (Buy, TP: SEK1700.00) - Q1e revenue of EUR500m

We reiterate our BUY and SEK1,700 target price ahead of the Q1 results (due at 07:30 CET on 24 April). We see re-rating potential from e.g. stabilising Live revenue growth YOY (c25% YOY in Q1e at constant currency), confirmed by our proprietary tracker data, and an improving cash distribution story. Notable upcoming new Live game releases include ‘Lightning Storm’, which we believe is scheduled for late Q2.

Arjo (Buy, TP: SEK60.00) - Steady as she goes

We expect broadly stable trends in Q1 versus recent quarters, and forecast decent underlying growth, with patient-handling and pressure sore prevention again facing some headwinds but service and rental still going strong. We also expect a small negative impact from Red Sea-related logistics issues, but not enough to alter the overall picture. We reiterate our BUY and SEK60 target price.

Evolution (Buy, TP: SEK1700.00) - Flagging a trend shift

After two years of slowing growth in Live revenue and daily players (from very high levels), we see more encouraging trends YTD. According to our tracker, Evolution’s total daily average players are up 15% QOQ QTD (2–3% in Q3–Q4 2023), while YOY growth has stabilised at >30%. Our data also suggests that Evolution has maintained its superior market share, which, overall, increases our conviction in the growth outlook. We reiterate our BUY and SEK1,700 target price.

Alk-Abello A S: 1 director

A director at Alk-Abello A S bought 1,880 shares at 132.600DKK and the significance rating of the trade was 53/100. 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 clearl...

ALK-Abello (Buy, TP: DKK140.00) - Q3 rebound was not a one-off

While the Q4 results were fairly in line, sales growth for the important European tablets was stronger than expected, showing the rebound in Q3 was not a one-off. In addition, the 2024 guidance notably suggests organic growth returning to >10% and still-strong margin expansion, while the CMD in Q2 is likely to reconfirm the 2025 EBIT margin target. We reiterate our BUY and have raised our target price to DKK140 (127). European tablet momentum still strong. Q4 organic growth of c10% was largely ...

ALK-Abello (Buy, TP: DKK127.00) - Looking for continued tablet growth

We expect the focus of the Q4 results to be on ALK showing the rebound in European tablet growth in Q3 was not a one-off, which should further help restore investor confidence. We also expect it to provide guidance suggesting organic growth returning to >10% in 2024 and still-strong margin expansion. However, we believe it is still too early for a strategy update. We reiterate our BUY and have raised our target price to DKK127 (120).

Evolution (Buy, TP: SEK1700.00) - Stabilising Live growth is promising

In light of healthier Live revenue growth trends than we expected, promising signs of stabilising Live revenue growth YOY, and intact estimates, we have raised our target price to SEK1,700 and reiterate our BUY. In our view, more successful expansion (new studios and step-up in recruitment), new games development, and potential re-regulation in key markets (e.g. the US, Latin America) increase the likelihood of a re-rating this year.

Arjo (Buy, TP: SEK60.00) - End of 2023 bodes well for 2024

Q4 earnings were stronger than expected, with the drivers boding well for the start of 2024 even though the guidance remains on the conservative side, in our view. The beat was driven by a stronger than expected gross margin, and we believe the underlying effects should carry into 2024. We have raised our 2024–2026 estimates, mainly for the gross margin. We reiterate our BUY and have increased our target price to SEK60 (55).

Evolution (Buy, TP: SEK1640.00) - Needs to stabilise the Live growth

We expect Q4 Live revenue to be up 20% YOY with a 70.2% EBITDA margin, with stepped-up recruitment to face the rising demand. Next, management needs to prove that the Live revenue growth can stabilise and not decelerate more in 2024. With a credible plan, structural growth tailwind, market leadership, sizeable expansion and continued focus on the expansion of Live games, we reiterate our BUY and SEK1,640 target price.

Arjo (Buy, TP: SEK55.00) - Q4 looking good

We believe the Q4 results (due at 07:00 CET on 30 January) will confirm the trends of recent quarters, leading us to expect organic growth towards the top end of the 3–5% guided range and a QOQ improvement in the gross margin. Furthermore, we expect management to stick with the same range for the 2024 guidance, while we forecast c4.5% (in line with consensus). We reiterate our BUY and SEK55 target price ahead of the Q4 report.

ALK-Abello (Buy, TP: DKK120.00) - Relief on European tablet growth

The Q3 results were stronger than expected, especially the rebound in the important European tablet sales growth. Management indicated that initiation season has started well, supporting >10% European tablet sales growth for 2024, providing some relief and corroborating our positive view of the stock. We reiterate our BUY and have increased our target price to DKK120 (110).

ALK-Abello (Buy, TP: DKK110.00) - All eyes on European tablet sales

We expect the focus for the Q3 results (due at 07:30 CET on 15 November) to be the likely rebound in European tablet sales, which we expect will help restore investor trust, and the first comments from the new CEO (starting 1 November), albeit it is likely too early for a strategy update. We continue to see the valuation as a good entry point, with several potential catalysts. We reiterate our BUY and DKK110 target price.

Evolution (Buy, TP: SEK1640.00) - Dealing with the expansion

We reiterate our BUY but have lowered our target price to SEK1,640 (1,725), reflecting 2–5% cuts to our 2023–2024e revenue. Underlying demand for Evolution’s Live casino is growing rapidly, and management is addressing the ‘undersupply situation’, e.g. with 6–7 new studios opening between H2 2023 and end-2024. The cash flow generation continues to impress, and we believe the potential for buybacks has increased for the near term (EUR1.1bn cash at end-2023e).