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).

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.

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).

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.

Arjo AB: 1 director

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Arjo (Buy, TP: SEK55.00) - Solid Q3 report

Q3 earnings were a tad better than expected. Organic growth was 4.6% YOY for Q3 and for 9M 2023. We believe the c8% YOY organic growth in the US in Q3 was a positive. The Q4 gross margin guidance was a bit lower than expected, hurting the share price. However, we expect the Q4 underlying adj. EBITDA to be solid due to product mix and do not see the comments about the gross margin as too negative. We reiterate our BUY and SEK55 target price.

Arjo (Buy, TP: SEK55.00) - Slow but steady normalisation of end-market...

We expect an uneventful Q3 report, with continued trends from Q2 (Q3 earnings due at c07:00 CET on 19 October). We forecast a gross margin in line with the guidance. Overall, activity in elective procedures should continue to improve and over time have a positive effect on Arjo. For the SEM Scanner, improvements are slow, but we believe it is moving in the right direction. We have only made minor estimate changes ahead of the Q3 results, and reiterate our BUY and SEK55 target price.

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Arjo (Buy, TP: SEK55.00) - Solid Q2

Arjo reported solid earnings for Q2. Sales of SEK2,686m beat consensus by c1% and our estimate by c3% and adj. EBITDA beat consensus by 4%. The gross margin of 42.5% was 10bp above consensus and 20bp above our estimate. Organic growth was 5% in Q2 and 4.6% in H1. Guidance for 2023 was reiterated at 3–5% organic growth, which we believe may be conservative. We reiterate our BUY and SEK55 target price.

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Arjo (Buy, TP: SEK55.00) - Q1 trends to continue in Q2e

We believe the Q1 trends will be maintained in Q2e; thus, sales outside the US should progress well, while the business climate remains challenging in the US for Arjo’s patient-handling operation. SEM Scanner sales growth has slowed, in line with the trend announced with the Q1 results. Some costs (e.g. transportation and logistics) are falling, while others (e.g. salaries) are increasing. Overall, we are in line with consensus on sales and adj. EBITDA for 2023e, but below for Q2e. We reiterate ...

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Arjo (Buy, TP: SEK60.00) - Q1 beat – but mixed guidance

Q1 sales were 4% above consensus and adj. EBITDA c7% above (our estimates were close to consensus), driven by a stronger than expected gross margin. On the negative side, the company lowered its SEM Scanner expectations for 2023 and the data from the RCT for WoundExpress has been delayed until mid-2024. We reiterate our BUY and SEK60 target price.

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Arjo (Buy, TP: SEK60.00) - Q1 likely 2023’s weakest quarter

We believe the Q1 growth (results due at 07:00 CET on 20 April) has been in line with the company’s comments on the Q4 2022 conference call. Q1 should be the final quarter where comparables in Critical Care Rental are tough. FX should be positive on the top line but neutral to EBIT. Arjo reiterated that the year should be back-end loaded but we believe this is reflected in consensus. We reiterate our BUY and SEK60 target price.

Arjo (Buy, TP: SEK60.00) - 2023 guidance looks conservative

Q4 earnings were broadly in line with expectations, despite some misses, and we believe the 2023 guidance looks conservative. We have made only minor changes to our estimates, and we reiterate our BUY and SEK60 target price.

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Arjo (Buy, TP: SEK60.00) - Expecting a turnaround in 2023

Arjo lowered its 2022 organic growth guidance from c3–5% to 0% with its Q3 report as a result of far slower growth in Q3 and Q4 than initially expected; this looks realistic to us. We forecast c2% organic growth in 2023 and a continued improvement in the gross margin from current levels as previously announced price rises increasingly flow through. We reiterate our BUY and SEK60 target price.

Sector Fast Comment - Hospital data update

Better hospital margins in September Weaker procedure volume momentum into Q4 Small positive for capex exposure

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