Fasadgruppen

We initiate coverage on Fasadgruppen with a Buy recommendation and a target price of SEK 26 per share. Fasadgruppen's value creation model is based on owning and developing businesses while consolidating the fragmented market for exterior property work. The company has created a strong market position with well-established local brands that generate good cash flow, which is crucial for Fasadgruppen to continue executing on its acquisition strategy. The valuation has declined to a very low level following a period of weak market conditions and moderate performance. While the environment remains challenging and near-term performance is likely to stay subdued, we expect the business to recover in the latter part of the year and view the risk/reward as attractive at current valuations.