Set for spicy growth

Our recent field trip to India (visiting Volvo, Epiroc, Trelleborg, Autoliv and others) alongside our analysis suggests the country is set to take centre stage as a global manufacturing hub over the coming decade, shifting from being the sixth- to the third-largest end-market for the Swedish Industrial sector. India’s strong economic growth trajectory and favourable demographics mean the companies: 1) see double-digit growth as sustainable; 2) are pursuing manufacturing capacity expansions; and ...

Who stands to benefit?

A potential peace deal between Russia and Ukraine could unlock one of the largest reconstruction efforts in modern history. The World Bank estimates Ukraine will need USD486bn in rebuilding efforts over the next decade, but we estimate this would add only c2% to annual European construction spending. While the direct earnings effect may be modest, we expect the “rebuild Ukraine theme” to drive investor sentiment. We see Volvo, Epiroc, Hexagon, Metso, Hiab and ABB as some of the primary beneficia...

Lindab International (Hold, TP: SEK225.00) - No rush

Overall, the Q4 report was in line with the 17 January profit warning, and after updating our model (incorporating the negatives), we have cut our 2025–2026e adj. EBIT by c19% on average, and our target price to SEK225 (252); we reiterate our HOLD. We continue to expect a tough H1 for Lindab and despite cost-cutting efforts, remain on the sidelines, with the valuation looking fair.

Swedish Small and Medium Caps Cases

Swedish Small and Medium Caps Cases

Lindab International (Buy, TP: SEK290.00) - Ready for market recovery

Both business areas reported solid margins in Q2 that, combined with somewhat more positive outlook comments, mean we have raised our 2024–2026e adj. EBIT by c2% on average. Structural improvements at Lindab leave it well positioned to increase earnings once the market comes back, we believe. We reiterate our BUY and have raised our target price to SEK290 (270).

Lindab International (Buy, TP: SEK270.00) - Profile margins bouncing b...

For Q2, we estimate sales of SEK3,478m, with organic growth of -4% YOY and an adj. EBIT margin of 8.5%, which overall puts us somewhat below Bloomberg consensus on adj. EBIT. We have increased our 2024–2026e adj. EBIT by c3% on average, and raised our target price to SEK270 (244) after updating our valuation. We reiterate our BUY and note that the latest Euroconstruct data indicates a solid market recovery in the Nordic construction market (c40% of Lindab’s sales) in 2025.

Lindab International (Buy, TP: SEK244.00) - A bump in the road

Lindab’s markets remain under pressure, but comparables are becoming easier, and we expect positive organic growth in H2 2024. Due to the weak Q1, we have reduced our 2024–2026e adj. EBIT by c5% on average and our target price to SEK244 (250), but reiterate our BUY. We expect earnings growth from Q4 onwards, and see upside potential to our target price.

Lindab International (Buy, TP: SEK250.00) - M&A adds value

Q4 was overall weaker than we expected, driven by lower profitability. As we include the most recent M&A announcements (Airmaster brings an especially strong margin) but lower underlying estimates, we have raised our 2024–2025e adj. EBIT by c3% on average and reiterate our SEK250 target price. Lindab is picking up M&A speed, while we expect positive organic growth in H2 2024. We reiterate our BUY.

Swedish small caps

Swedish small caps

Lindab International (Buy, TP: SEK250.00) - Even brighter days ahead

For Q4e, we are c2% below Bloomberg consensus on sales and c12% below on adj. EBIT. We have cut our 2023–2025e adj. EBIT by c7% on average (c3%-points due to FX), while we reiterate our BUY and SEK250 target price based on our updated valuation (multiples and DCF rolled forward). We see scope for organic growth in H2 2024e (and beyond) and highlight the c9% FCF yield for 2024–2025e. In the medium to longer term, we believe Lindab is set to benefit from the regulatory trends in the European const...

Lindab International (Buy, TP: SEK250.00) - Raising the bar

Q3 was another quarter of impressive margin execution, which together with stronger-than-expected sales growth resulted in Lindab beating our estimates. Management announced new, ambitious 2027 targets, which we see as positive. We have raised our 2023–2025e adj. EBIT by c5% on average, and our target price to SEK250 (238). We reiterate our BUY.

Lindab International (Buy, TP: SEK238.00) - Double-digit FCF yield for...

We estimate Q3 sales of SEK3,122m, with -15% YOY organic growth and adj. EBIT of SEK250m. Lindab continues to operate in a tough market environment, especially for its Profile Systems business, which has c50% of its sales in Sweden. We have raised our 2023–2025e adj. EBIT by c1% on average (due to M&A and FX changes), and reiterate our SEK238 target price and BUY.

Lindab International AB: 2 directors

Two Directors at Lindab International AB bought 2,222 shares at between 155.980SEK and 161.588SEK. The significance rating of the trade was 51/100. 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 director...

Lindab International (Buy, TP: SEK238.00) - Another strong quarter

Lindab continues to prove its positive qualities, with strong margin resilience in a tough market. CEO Ringdahl has initiated cost-cutting measures and stated that Ventilation had positive YOY organic growth in June (we, however, remain conservative in our growth estimates). We still like the direction in which Lindab is heading, while its markets remain tough. We have raised our adj. EBIT for 2023–2025e by c2% and our target price to SEK238 (235) as we reiterate our BUY.

Lindab International (Buy, TP: SEK235.00) - Far better than feared

The Q1 results beat our estimates and consensus, with organic growth of -5% YOY versus our -10% (no consensus) and an adj. EBIT margin of 8.2% versus our 6.7% and consensus of 7.5%. Ventilation Systems reported solid margins (10.2% on EBIT) despite temporary raw-material headwinds and tough market conditions. Largely on the back of this, we have raised our 2023–2025e adj. EBIT by 10% on average and our target price to SEK235 (212); we reiterate our BUY.

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.

Lindab International (Buy, TP: SEK212.00) - Few surprises – limited ch...

The Q4 results were broadly in line with our estimates, with stronger organic growth but weaker margins than we expected. We have made only minor changes to our estimates, reducing our 2023–2024e adj. EBIT by 1.8% on average. While the coming quarters look set to be tough, we believe this is more than reflected in the share price. We reiterate our BUY but have lowered our target price to SEK212 (215).

Lindab International (Buy, TP: SEK215.00) - Set for final inventory ad...

Lindab is due to report Q4 results at 07:40 CET on 9 February. We estimate -2% YOY organic growth and margins affected by temporary inventory adjustments in Q4. We have reduced our 2022–2024e adj. EBIT by 4% on average, and in turn our target price to SEK215 (220), while we reiterate our BUY.

Industrial blues

DNB Markets’ Strategy and Macro team suggests being underweight industrials, due to the sector’s premium valuation and risk of >10% earnings cuts in 2023 from a cyclical slowdown. Our sensitivity analysis shows Volvo, Dometic and Autoliv have the greatest downside risk to earnings in a cyclical slowdown, while Assa Abloy and Hexagon (two of our sector top picks) should be most resilient. We prefer mining, energy, aftermarket and China exposure.

Northern Lights