William Demant Holding (Hold, TP: DKK220.00) - 2019 guidance below est...

2019 guidance below estimates H2 sales were slightly below consensus, and the adj. EBIT margin was weak at just c19.3% versus our forecast and consensus of c20.8%. The 2019 EBIT guidance of DKK2.65bn–2.95bn was also weak, with the top end below both our estimate and consensus. In addition, the successor to Oticon Opn was revealed, set for launch in Q1, in time for the VA window in May. We expect consensus 2019e EPS to come down c3% and a 3–5% negative share price reaction today.

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William Demant Holding (Hold, TP: DKK220.00) -

William Demant Holding (WDH DC, Hold) - (14 pages)

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William Demant Holding (Hold, TP: DKK220.00) -

William Demant Holding (WDH DC, Hold) - (13 pages)

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William Demant Holding (Hold, TP: DKK220.00) - Continues to ride the O...

William Demant’s introduction of its essential category at the EUHA conference (17–19 October) to us indicates that the prolonged life cycle of Oticon Opn is ending soon. Other main conference topics were Sonova’s new 2.4GHz platform, and GN Hearing’s LiNX Quattro. We expect unchanged guidance with the Q3 trading update (due 6 November before market open). We maintain our DKK220 target price, but have upgraded to HOLD (SELL) following recent multiples contraction.

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William Demant Holding (Sell, TP: DKK220.00) - Multiple contraction wa...

Top-line growth of c4.2% in H1 beat our estimate of 3.2% and consensus at 3.8%, while the adj. EBIT margin fell short at 18.8%. The full-year EBIT guidance was narrowed to DKK2.65bn–2.85bn (towards the high end) but not upgraded as we had expected ahead of the report. We struggle to understand the significant share price increase and multiple expansion YTD and reiterate our DKK220 target price and SELL recommendation, as we do not believe the outlook justifies the valuation.

William Demant Holding (Sell, TP: DKK220.00) - Guidance narrowed to hi...

William Demant Holding (WDH DC, Sell) - Guidance narrowed to high end (9 pages)

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William Demant Holding (Sell, TP: DKK220.00) -

William Demant Holding (WDH DC, Sell) - (14 pages)

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William Demant Holding (Sell, TP: DKK200.00) - Limited news from CMD

There was no change to the financial guidance, as expected, rather focus was on the strategy of becoming a hearing healthcare company. Management also went into detail on its R&D efforts, the wholesale and retail business, and synergies across the different business areas, as well as providing an update on the implant business. We keep our SELL recommendation and DKK200 target price based on limited CMD news.

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William Demant Holding (Sell, TP: DKK200.00) -

William Demant Holding (WDH DC, Sell) - (13 pages)

A new market leader in the making

We view yesterday’s announced merger between Sivantos and Widex as the beginning of new era. With limited negative sales synergies expected, the combined company is set to become the new market leader in the hearing aid manufacturing industry. This move should create a strong participant that we expect to increase competition significantly, and is likely to leave GN Hearing as forever no.4 in the industry.