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Faster recovery & impressive cost improvement

Organic improvement faster than expected

Putting the bolt in bolt-on

Bufab (Hold, TP: SEK415.00) -

We reiterate our HOLD but have raised our target price to SEK415 (405) on higher peer multiples. Q2 sales and EBITA were in line with our estimates, while organic growth YOY improved from -11% to -7% compared to Q1, and management indicated a demand turnaround. While the sale of low-margin manufacturing units should improve profitability, we have cut our 2024–2025e adj. EBITA by 2–3% owing to the associated sales drop.

Bufab (Hold, TP: SEK405.00) - Our thoughts ahead of Q2

In the Q2 report, we will focus on whether YOY organic net sales growth has improved QOQ, indicating the potential for organic growth to turn positive towards year-end. We reiterate our HOLD but have raised our target price to SEK405 (375) due to higher peer valuations, somewhat offset by lower FX assumptions, and we have cut our 2024–2025e EBITA by 3–2%.

Bufab (Hold, TP: SEK375.00) - Please HOLD for a recovery

We reiterate our HOLD but have cut our target price to SEK375 (410) following the Q1 report, with sales missing our estimate by 4% and EBITA by 10% in a still-challenging market that weighed on growth and margins. Lower-than-expected organic growth has prompted us to delay our recovery assumptions, and we have reduced our 2024–2025e EBITA by 2–5%.

Bufab (Hold, TP: SEK410.00) - HOLDing on ahead of Q1 results

We expect a continued organic revenue decline YOY in Q1, but acknowledge Bufab’s focus on gross margin expansion through repricing of less-profitable customer contracts. We have made only minor adjustments to our estimates and reiterate our HOLD, but have raised our target price to SEK410 (390) on higher peer valuations.

Bufab Holding AB: 1 director

A director at Bufab Holding AB sold 2,000 shares at 422.400SEK and the significance rating of the trade was 55/100. 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...

Bufab (Hold, TP: SEK390.00) - Margins are holding up

We reiterate our HOLD and SEK390 target price following a Q4 with adj. EBITA 3% below our estimates. The negative organic growth worsened QOQ, indicating that Q3 did not mark a trough. However, the margin performance and cash flow were solid. We have edged down our 2024e adj. EBITA by 4% on lower growth, partly offset by higher margins.

Bufab (Hold, TP: SEK390.00) - HOLDing our breath ahead of Q4

Following an organic growth decline in Q3, we now expect YOY organic growth to have troughed and believe a continued inventory release has the potential to provide strong cash flows for Q4e. We have raised our target price to SEK390 (345) on higher peer multiples but have downgraded Bufab to HOLD (BUY) given the strong share price performance in recent months and the valuation relative to its history and peers. Q4 preview. We expect revenues of SEK2,038m, -2% YOY (-4%-points organic growth and +...

Bufab (Buy, TP: SEK345.00) - Organic growth dips, cash flow rips

Q3 revenue was in line with our estimate but EBITA was 16% below, due to earn-out remeasurements. Organic growth declined to -7%, as we expected, and management reiterated its cautious near-term outlook. However, cash flow was once again strong, adding confidence to the deleveraging story. We reiterate our BUY but have cut our target price to SEK345 (350).

Bufab (Buy, TP: SEK350.00) - No drama in Q3e

Following a mixed Q2, we expect Q3 to have continued along the same trajectory, with negative organic growth, a strong EBITA margin, and an inventory release. We reiterate our BUY, but have lowered our target price to SEK350 (375).

Bufab (Buy, TP: SEK375.00) - Decent underlying performance

Mixed Q2 results revealed revenues just below our estimate but a beat on EBITA and very strong operating cash flow. However, management gave a cautious outlook, triggering the large negative share price reaction, but we believe the Bufab long-term case is intact. We reiterate our BUY but have lowered our target price to SEK375 (390).

Northern Lights

Bufab (Buy, TP: SEK390.00) - Moderating growth expected

Following a strong EBITA margin beat versus our forecast in Q1, we expect continued revenue and EBITA growth in Q2, but that organic revenue growth will turn negative due to continued weak macro trends, tough YOY comparables, and a somewhat more difficult pricing environment. We reiterate our BUY and have raised our target price to SEK390 (380).