Multitude’s stock has continued its positive trend after its strong Q1 results. The earnings-based valuation is not expensive, but with the risen balance sheet-based valuation, the expectations of the future sustainable returns on equity have elevated clearly. We feel the valuation has reached a neutral level (P/B 1.0x) and thus the risk/reward ratio has somewhat weakened, and we believe that the best buying opportunities have been left behind.
Relais' value creation model is based on owning and developing businesses and consolidating the vehicle aftermarket. Raw material for this, i.e. cash flow, is produced by its current businesses, which, according to our estimate, will grow in the long run roughly at the pace of economic growth. However, we expect the company to accelerate growth with acquisitions also in the future, and in light of historical evidence, we consider this the right choice from the perspective of value creation.
H&M will report its Q2’25 (March-May) results on Thursday, June 26th, at 8:00 am CET. While H&M is progressing through its turnaround, we believe there will be limited visibility of this in Q2, due to modest sales growth and continued headwinds to gross margins. In our view, the valuation multiples are still on the high side, and we therefore see little upside on a 12-month horizon. As a result, we reiterate our Reduce recommendation and target price of SEK 130 per share.
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We are discontinuing our coverage of Hexicon as the company has terminated the research service agreement. Consequently, we will no longer be giving a target price (prev. 0.20) or recommendation (prev. Sell) for the stock. Hexicon possesses a large and diversified project portfolio with clear opportunities to create value at a relatively low cost, as projects are intended to be divested before the capital-intensive construction phase. However, scaling up growth has been slow, though successful divestments of larger projects have the potential to change this in the coming years. In our view, Hexicon’s shareholders should pay particular attention to the company’s ability to develop and divest its project portfolio, as this has a clear impact on how quickly the company can reach positive cash flow. Furthermore, debt levels are very high, and the company requires immediate liquidity solutions. As a result, we believe that shareholders should closely follow the company’s plans to resolve its financial position going forward.
Inderes reported weak monthly sales data for May, with a decline of 12%. Although this owes partly to the timing of certain events (from May to June) our first read is that May-June sales are likely to fall somewhat short of our current estimates.
Following the successful Terveystalo cooperation, Nightingale is now increasing its commercial sample volumes with its healthcare partners in Singapore and the US. The company's pilot phase customerships are also in general expected to progress, and we believe the company is actively negotiating new partnerships as well. However, we are now particularly looking for signs of strong growth in commercial sample volumes, which would substantially reduce estimate risks.
We have raised our earnings estimates following Mandatum's CMD, as the profitability outlook for asset management is stronger than before. In addition, our profit distribution forecasts increased clearly.
Tecnotree announced on Monday that it had entered into an agreement with a global mobile virtual network operator to deploy Tecnotree's BSS platform in the United Kingdom and other European markets. The five-year contract is valued at approximately 19.6 MUSD, which is a significant deal on Tecnotree's scale.
We forecast that the company will continue its systematic strategy implementation, moderate organic growth in the coming years and accelerate growth through acquisitions. Currently, the focus is on internationalization, which was further strengthened by an interesting Polish acquisition.
Faron presented the results of the BEXMAB hematological cancer study in a webcast on Monday. We believe the results support advancing to the final, critical clinical Phase III.
Recent developments in Hexicon’s project portfolio have been mixed, in our view. While we view the recent divestment as positive, as they reduce the financing risk somewhat and indicate confidence in the company’s ability to divest early-stage projects successfully, the progress of the divestment of the important MunmuBaram project seems to be slower than earlier anticipated. In our view, the company needs additional capital in the coming month, forcing Hexicon to explore other financing options on uncertain terms. Against this backdrop, we believe the near-term risk/reward is unfavorable. Therefore, we reiterate our Sell recommendation and keep our target price of SEK 0.20 per share unchanged.
Verve’s revenue guidance for 2025 was above our pre-Q1 estimates, although the implied margin (at the midpoint) was a bit soft due to target investments to expand the sales organization
Although the Q1 result was a clear disappointment in terms of profitability, the market has finally started to pick up. This increases our confidence in the earnings improvement we forecast, and if the earnings improvement materializes, the stock looks attractive.
The past few years have been challenging for Enento, as weaker demand for consumer credit information due to structural changes in the Swedish market has driven down revenue and results. At the start of this year, the company returned to growth after a two-year downward trend and, despite the still somewhat cloudy outlook for the Swedish market, we expect the company to continue growing in the coming quarters and years.
