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Elekta (Buy, TP: SEK100.00) - ESTRO 2018 comments

At this year’s ESTRO in Barcelona this weekend, Elekta once again highlighted that Unity was its most important – yet to be launched – product. Over the weekend, it also announced an order for five Unity systems (total value GBP25m). This takes the total order number up to 26 systems (before approval). We still believe the CE mark should be approved in June with FDA clearance 3–4 months after. We reiterate our BUY and SEK100 target price.

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Elekta (Buy, TP: SEK100.00) - Earnings beat, but guidance revised

Q3 earnings beat consensus for the second quarter in a row (but just missed our estimate). However, management revised its 2017/18 adj. EBITA margin guidance from 20%+ to "around 19%", but reiterated it expects to reach its margin target in 2018/19. Management said development of the Unity system is going to plan, and it expects to have the CE mark in H1. We reiterate our BUY and SEK100 target price.

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Elekta (Buy, TP: SEK100.00) - Moving closer to Unity approval

Elekta is set to report Q3 FY2017/18 earnings on 2 March at 07:30CET. We believe that the most important item for the stock market will be comments on the development for Unity – expected CE mark in May/June 2018 as well as FY2017/18 guidance. The company have been adamant over the last quarters that they will reach its guidance of an EBITA margin above 20% for the year. We reiterate our BUY recommendation and SEK100 price target.

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Unity in focus at ASTRO 2017

At the 2017 ASTRO meeting earlier this week, Elekta pre-launched its Unity MR-LINAC system in the US. The company expects the device to receive a CE mark in November 2017 and 510(k) clearance in early 2018. We remain confident that the Unity will become a transformational product for the company in particular and the radiation therapy segment as a whole. We reiterate our BUY recommendation and SEK110 target price.

Signs of better times to come

Elekta announced Q1 earnings on 23 August. The report was mixed, with sales and order intake in line with consensus, but adj. EBITA lower than expected. The main culprit for the adj. EBITA miss was higher than expected R&D spending. Overall, Q1 is a ‘small’ quarter and many signs are pointing in the right direction. We believe investors should focus on the upcoming ASTRO meeting and approval of Unity. We maintain our BUY recommendation and SEK110 target price.