B3 Consulting Group: Still at the mercy of the IT consulting market - ABG

* We cut '25e-'27e adj. EBITA by 4-8%* Expect some EBITA growth in Q3* NTM EV/EBITA ~9xExpectations for Q3'25B3 Consulting Group will publish its Q3'25 report on 22 October. We expect sales of SEK 268m, implying 9% y-o-y growth (and an organic decline of 10%). This is in line with market data, which suggest sluggish demand conditions, flat-to-negative hourly prices and a stale net recruitment trend. We also expect EBITA of SEK 7m, corresponding to an EBITA margin of less than 3%.Estimates down a bitWe cut our '25e-'27e sales estimates by 1-3% due to continued weak IT consultant market data, and reduce adj. EBITA by 4-8% for the same period. While bench capacity has largely been addressed, the current market environment still limits the company's ability to hike hourly prices. On a more encouraging note, however, we expect positive net recruitment toward year-end, a move that could prove beneficial if coupled with a broader IT consulting market recovery.ValuationOn our revised estimates, B3 is trading at ~9x NTM EV/EBITA, which is in line with current peer multiples. In addition, the company is trading ~40% below its historical EV/FTE multiple, indicating that it is currently expected to generate lower earnings per consultant than historically. We reiterate our fair value range of SEK 120–190, as we continue to view the current margin profile as cyclical rather than structural, and not representative of a steady-state margin over the coming five years. While the near-term outlook suggests continued challenging conditions, we expect improvement toward the latter half of 2026e.