Spared from tariffs but uncertainty increases

AFRY (Buy, TP: SEK240.00) - Step in the right direction

In Q4, low capacity utilisation and weak demand in real estate, as well as parts of Industrial & Digital Solutions (IDS) and Process Industries (PI) weighed on EBITA. However, the Infrastructure turnaround continued, and we believe the renewed focus with the new CEO should improve profitability. We reiterate our BUY and have raised our target price to SEK240 (200).

New CEO sets sights on profitability

Fears of a weaker Q4 overblown

Up against tough comps in Q4

AFRY (Buy, TP: SEK200.00) - Headwinds set to weigh on Q4e

For Q4, we expect similar market and demand dynamics to Q3, with low capacity utilisation in Process Industries (PI) and weak demand in parts of Industrial & Digital Solutions (IDS) and Real Estate weighing on EBITA. However, the infrastructure turnaround looks set to continue, in our view. We reiterate our BUY and SEK200 target price.

AFRY (Buy, TP: SEK200.00) - Market headwinds set to remain

In Q3, low capacity utilisation and weak demand in real estate, parts of Industrial & Digital Solutions (IDS) and Process Industries (PI) weighed on EBITA. However, the Infrastructure turnaround continued. Capacity utilisation was flat YOY excluding PI. We reiterate our BUY but have cut our target price to SEK200 (230) on market weakness in pulp & paper, real estate and IDS.

More questions than answers after Q3

Uncertainty remain after weak Q3

Too much uncertainty, we stay HOLDers

Q3 report on 25 Oct., market data not supportive. Negative revisions, '24-'25e EBITA down 2-3%. We reiterate HOLD, IDS might struggle in this environment.

AFRY (Buy, TP: SEK230.00) - Q3 likely a repeat of Q2

For Q3, we expect similar market and demand dynamics to Q2, with low capacity utilisation in Process Industries (PI) and weak demand in parts of Industrial & Digital Solutions (IDS) weighing on EBITA. However, the infrastructure turnaround looks set to continue, and group capacity utilisation should improve YOY, excluding PI, in our view. We reiterate our BUY and SEK230 target price.

AFRY (Buy, TP: SEK230.00) - Infrastructure turnaround

In Q2, low-capacity utilisation in Process Industries (PI) and weak demand in parts of Industrial & Digital Solutions (IDS) weighed on EBITA. However, the infrastructure turnaround continued, and group capacity utilisation improved YOY excluding PI and timing effects in Energy. We reiterate our BUY and have raised our target price to SEK230 (203).

Not convincing enough

Q2 EBITA +1% vs Infront consensus. Additional weakness within PI creates uncertainty. We lower '24e EBITA by 2% and move to HOLD (Buy).

Q2 was fine but weak orders

Less risk in Process Industries, up to BUY

Q2 report on 16 July, market data show signs of improvement. Minor positive revisions, '24e EBITA up 2%. We upgrade to BUY, valuation supportive.

The power of M&A compounding

AFRY (Buy, TP: SEK203.00) - On track

In Q1, low capacity utilisation in Process Industries (PI) weighed on EBITA, but this headwind should ease from Q2. The infrastructure turnaround continued, and group capacity utilisation improved YOY excluding PI. We expect group capacity utilisation to improve YOY from H2. We reiterate our BUY but have lowered our target price to SEK203 (205).

Sales miss offset by better cost control

Q1 EBITA in line with Infront consensus. Orders up 5% q-o-q gives hope of H2 recovery. We lower '24e EBITA by 1%.

AFRY Minor model adjustments

We have updated our 2024–2026 estimates, owing primarily to higher net financial costs, as we now expect higher interest rates for longer and higher net debt in 2024–2026 following discussions with the company. We do not consider these changes to be material, and we have not changed our BUY recommendation. We reiterate our SEK205 target price.

AFRY (Buy, TP: SEK205.00) - Infrastructure turnaround

We have upgraded AFRY to BUY (HOLD) and raised our target price to SEK205 (170) on our expectation of an Infrastructure division turnaround. For Q1, we see similar market and demand dynamics to Q4. We expect solid demand across most segments to offset weakness in real estate, pulp and paper, and parts of Industrial & Digital Solutions, supporting 3% sales growth YOY, but with market headwinds weighing on profitability.