Glaston’s Q1 order intake improved 4% y/y continuing the ongoing recovery from the order drought during 2020. Especially the services business is set to improve going deeper into 2021E, as restrictions are lifted and Glaston can get back to servicing its installed machine base. We raise our order intake and sales estimates for 2021E and lift our fair value range to EUR1.0-1.20.
Glaston’s share price has benefitted from the recent multiple expansion in the cap goods sector, but its discount to the Nordic cap goods peer group remains at 35% on 2021E EV/EBITA. We lift our fair value range to EUR1.0-1.2 from EUR0.7-0.9, suggesting 30% discount to the peer group in the fair value range mid-point. We believe that a significant discount to the peer group is still warranted, but there is potential for re-rating if Glaston can keep delivering positively in 2021E.
Source: Finwire News.