Ambea AB: 2 directors

Two Directors at Ambea AB sold/bought 7,635,101 shares at between 59.550SEK and 63.300SEK. The significance rating of the trade was 99/100. 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 t...

Ambea (Buy, TP: SEK76.00) - Yet another strong showing

Solid revenue, earnings and FCF growth continued, with the components to reach its medium-term >9.5% EBITA margin target becoming more visible. The robust demand outlook combined with Ambea’s asset-light and cash-generating model, with potential acquisition and restarted share buybacks, and an attractive valuation (2024–2026e FCF yield of 12–17%), makes for a strong case, in our view. We reiterate our BUY and have raised our target price to SEK76 (72).

Swedish small caps

Swedish small caps

Ambea (Buy, TP: SEK72.00) - Solid business improvement case

We see a solid business improvement case playing out in Ambea, with 2023–2026e earnings and FCF set to bring its target of a >9.5% EBITA margin within reach, in our view. We like Ambea’s robust demand outlook combined with its asset-light and cash-generating model, with potential acquisition and capital-allocation opportunities, and an attractive valuation (2024–2026e FCF yield of 12–18%). We reiterate our BUY and have raised our target price to SEK72 (57).

Ambea (Buy, TP: SEK57.00) - Building utilisation and capacity

Q3 showed continued solid revenue, earnings and FCF growth, with the components to reach its medium-term >9.5% EBITA margin target becoming more visible. The robust demand outlook combined with Ambea’s asset-light and cash-generating model, with potential acquisition and capital-allocation opportunities, and an attractive valuation (2023–2025e FCF yield of 13–17%) makes for a strong case, in our view. We reiterate our BUY and have raised our target price to SEK57 (50).

Ambea (Buy, TP: SEK50.00) - Continued strong insider support

Ambea’s Q2 report showed continued solid revenue and earnings growth, with the building blocks to reach its medium-term >9.5% EBITA margin target becoming more visible. The robust demand outlook combined with Ambea’s asset-light and cash-generating model, with potential acquisition and capital-allocation opportunities, and an attractive valuation (2023–2025e FCF yield of 13–21%) makes for a strong investment case in our view. We reiterate our BUY and SEK50 target price.

Northern Lights

Ambea (Buy, TP: SEK50.00) - Balancing headwinds well

While still far from firing on all cylinders, Ambea showed good Q1 progress with the building blocks to reach its >9.5% EBITA margin target becoming more visible. The robust demand outlook combined with Ambea’s asset-light and cash-generating model, with potential acquisition and capital-allocation opportunities, still suggests the stock is undervalued (2023–2025e FCF yield of 13–19%). We reiterate our BUY and have raised our target price to SEK50 (48.5).

Ambea (Buy, TP: SEK48.50) - Hit by sector headwinds

We see the continued de-rating of Ambea post-Q4 as a sector-wide issue in general, although its business model is not firing on all cylinders either at the moment. The robust demand outlook combined with the company’s asset-light growth and cash-generating model, with potential acquisition and capital allocation opportunities, still suggest the stock is undervalued in our view (2023–2025e FCF yield of 17–24%). We reiterate our BUY, but have cut our target price to SEK48.50 (52).

Northern Lights

Ambea (Buy, TP: SEK52.00) - Resetting valuation expectations

Even with its solid demand, we see near-term challenges from cost inflation not being fully offset by price changes; thus, we have reduced our 2022–2024e EPS by 6–14%. We still like Ambea’s demand outlook, asset-light growth, cash-generation, and attractive valuation (2022–2024e FCF yield of 12–16%). We reiterate our BUY but have cut our target price to SEK52 (73), resetting the valuation base to a 30% discount to its historical NTM valuation, better reflecting the current equity market trends.

Northern Lights

Ambea (Buy, TP: SEK73.00) - Share buybacks added

Q3 was close to our expectations, with solid sales growth and FCF. The company sent a strong message of FCF remaining robust, adding a 5m share buyback ambition, which largely balanced the slower phasing of new units and progress in Denmark, on our updated forecasts. We still like the demand outlook combined with Ambea’s asset-light growth and cash-generating model, with an attractive valuation (2022–2024e FCF yield of 12–17%). We reiterate our BUY and SEK73 target price.

Northern Lights

Ambea (Buy, TP: SEK73.00) - Rebuilding the new unit pipeline

The Q2 report was mixed, with weak underlying profitability but strong revenue growth. Ambea is finding organic opportunities and rebuilding its new units (beds) pipeline as well as making value-enhancing acquisitions. We still like the supportive demand outlook combined with Ambea’s asset-light growth and cash-generating model, with an attractive valuation (2022–2024e FCF yield of 10–14%). We reiterate our BUY and SEK73 target price.

Northern Lights

Ambea (Buy, TP: SEK73.00) - Occupancy recovery

Ambea enjoyed continued recovery in the elderly care home occupancy rate post-pandemic, offering a good Q1 beat, while our forecasts have been tweaked related to the phasing of new units. We see good potential in Vardaga’s new unit pipeline, with 64% not included in our forecasts due to the lack of an opening date, and in Ambea finding attractive acquisition targets. We still like its asset-light growth, cash-generating model, and attractive valuation (FCF yield 12–16% 2022–2024e). We reiterate ...

Ambea (Buy, TP: SEK73.00) - Improving in a weak sector

Good underlying delivery, clouded by legacy problems related to the Norwegian part of the Aleris Care acquisition, was not enough in Q4, as the general welfare service market again came under scrutiny with Orpea’s quality failure. Ambea’s challenges appear more controllable, but we have revised our valuation using lower sector multiples and a higher DCF risk premium, and have cut our target price to SEK73 (92). As it still looks attractive to us, we reiterate our BUY.

Ambea (Buy, TP: SEK92.00) - Returning to organic growth mode

Q3 showed good progress, with a return to solid organic growth (2.8% YOY) and profit margin expansion, as the occupancy challenge in Vardaga (elderly care) is now reversing, suggesting further recovery potential in 2022e. With c70% of Vardaga’s new unit pipeline not included in our forecasts (lack of opening dates and awaiting further occupancy improvements in mature units), we see a further source of medium-term growth, with the recent acquisition also value-enhancing in our view. We have raise...

Ambea (Buy, TP: SEK86.00) - Ongoing occupancy recovery

Q2 fell short of our expectations but included further signs that the occupancy challenge in elderly-care is now reversing, suggesting to us strong recovery potential in 2022e. With 60% of Vardaga’s new unit pipeline not included in our forecasts (lack of opening date, awaiting a recovery in occupancy in mature units), limited potential is discounted. However, it is unlikely this potential will be realised during our forecast period. We have only tweaked our forecasts. We reiterate our BUY, but ...