Nolato: Medical stable, cyclical risk in Engineered - ABG

Q3e: Medical stable, cyclical risk in Engineered
Estimates lowered by 2% p.a for '24e-'26e
14.2x f12m EV/EBITA, -6% vs. 5Y average 15.2x


Q3e: Medical stable, rising risk in Engineered

We expect some organic sales headwinds to persist in Q3 as vaporiser heating product (VHP) sales are still partly in the y-o-y comps. As a result, we estimate Q3 sales of SEK 2,272m, down 3% y-o-y (-1% organic, -2% FX). Keep in mind, however, that the VHP sub-segment was not profitable this time last year, and given it weighed on margins, the EBITA comps for both Q3 and Q4 look highly beatable, in our view. In Medical, despite some negative seasonality, we expect Nolato will be able to defend the double-digit EBITA margin that it has reported for two consecutive quarters. In Engineered Solutions, though, we see a risk of a deceleration in the near term, given an unexpected setback in manufacturing PMIs lately (ABGSC global weighted PMI 46.8 in Q3 vs. 47.7 in Q2). All in all, we expect Q3 adj. EBITA of SEK 224m, up 16% y-o-y, for a margin of 9.9% (8.2%).

Länk till analysen i sin helhet: https://cr.abgsc.com/foretag/nolato/Equity-research/2024/10/nolato---medical-stable-cyclical-risk-in-engineered/