Arjo (Hold, TP: SEK37.00) - Expecting more of the same

We forecast c3% organic growth YOY in Q4, similar to consensus, and a gross margin in line with the guidance (the report is due at 07:00 CET on 30 January). The UK has now published a 2025 healthcare budget, but Arjo is still being affected by issues with national spending plans in several other markets. We reiterate our HOLD but have trimmed our target price to SEK37 (40).

Arjo (Hold, TP: SEK40.00) - Budget uncertainty set to linger

Q3 sales and earnings disappointed, largely explained by soft capital equipment sales. Delays in the release of national healthcare budgets (including the UK, France and Poland) have hurt organic growth, and there remains significant uncertainty about how long the situation will persist. We believe investors will remain cautious until there are clear signs of improved demand. We have downgraded to HOLD (BUY) and cut our target price to SEK40 (58).

Weak earnings but strong cash flow generation

Soft on sales but good cash flow in Q3

Another solid quarter in Q3e

+3.6% organic sales growth and margin expansion in Q3e. No change in outlook expected. Q3'24 results due 17 October at 07:00am CET.

Positive US hospital capex outlook for H2'24

Arjo (Buy, TP: SEK58.00) - H2 likely skewed towards Q4

While we now see a slightly softer Q3 than previously, we believe Q4 could compensate for this (in line with the historical pattern). In addition, we now expect the strong SEK to have a greater negative impact on earnings. We still see underlying progress as expected and estimate 2024 organic sales growth in the upper part of the guidance of 3–5%. We reiterate our BUY and SEK58 target price.

Arjo (Buy, TP: SEK58.00) - Q2 in line; M&A back on the agenda

Q2 revenues and adj. EBITDA were in line with our estimates and consensus (3.7% organic sales growth YOY was a tad above consensus of c3.6%). Management said it expects H2 to be stronger than H1, particularly Q4 (tying in with the trend of recent years), we believe putting the 3–5% organic growth guidance in reach (and possibly beating it). We reiterate our BUY and SEK58 target price.

Promising earnings outlook at 9% FCF yield

BUY case confirmed after solid Q2 report. Small miss on EBIT driven by other operating items (non-cash). 9% FCF yield on stable cash flow generation is attractive.

Solid Q2

Continued strong growth in N. America in Q2e

Promising earnings trend set to continue. 3.9% organic sales growth and margin uplift in Q2e. Q2'24 results due 12 July.

Arjo (Buy, TP: SEK58.00) - Q2e in line with guidance

We believe the Q2 results (due at 07:00 CET on 12 July) should be much in line with the company’s guidance with the Q1 report and expect limited consensus revisions ahead of the report. We will focus on the gross margin and any comments on the full-year results. We reiterate our BUY and SEK58 target price.

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

A director at Arjo AB bought 30,000 shares at 35.500SEK and the significance rating of the trade was 59/100. 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 clearly showi...

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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