Boule Diagnostics: Low growth but margin improvements in Q2e - ABG

- Q2'24 results due 22 July - 24e-'26e EBIT revised down 1.0-2.1% - We expect 3.3% organic growth and 9.0% EBIT margin

Q2'24 expectations
We expect Boule Diagnostics to report an organic sales growth of 3.3% in Q2'24 and an EBIT margin of 9.0%, up from 6.2% in Q2'23. For Q2e we forecast sales of SEK 146.4m, driven by -3% growth in instrument sales but +8% growth for consumables. We forecast 25% growth in the number of instruments sold, but at a lower ASP compared with Q2'23, due to a large order to India. In total, we forecast instrument sales of SEK 45m and consumables sales of SEK 90m in Q2. We expect management to provide an update on the upcoming launch of Boule's new 5-part system in the US. In conjunction with the Q1'24 report, management announced that the product launch had been delayed to early 2026 (from H1 2025).

Estimate changes
We lower our '24e-'26e EBIT forecast by 1.0-2.1% ahead of Q2e, mainly due to updated FX assumptions but also some fine-tuning of our opex assumptions. We forecast 2.0% organic sales growth in '24e, held back by geopolitical challenges in emerging markets, but expect to see an improvement in the growth rate to 8.4%-8.5% in '25e-'26e.

NTM EV/EBIT at 9.0x, 35% below its historical average
Boule Diagnostics' share price is down 8-9% YTD and the valuation multiples are well below its historical averages, at 9.0x NTM EV/EBIT (vs. hist. avg. of 14.0x) and 9.9x NTM P/E (hist. avg. 18.4x), based on FactSet consensus estimates.

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