SinterCast: Solid '23e-'24e growth prospects, but lower FX - ABG

Strong USD should keep supporting Q4 results...
...but slight recent decline reduces expectations for '23e-'24e
Fair value of SEK 100-175 (110-200), 5-8% '23e-'24e div. yields


Q4e margins up y-o-y, but down from Q3 on seasonal effects

For Q4, we expect engine equivalents to come in at 3.5m, down from 3.6m in Q3, as Q4 is usually slower than Q3; however, considering the Q3 shutdowns, which should now be solved, we do not expect the difference to be substantial. We estimate this will translate into SEK 32.6m in revenue, up 10% y-o-y, mostly due to the continued strength of the USD in Q4, as the unusually high equipment sales in Q4'21 provide tough comps for organic growth. We expect a slight sequential gross margin decline, to 74%, down from 78%, as Q4 tends to perform below Q3 in this regard; however, the strong USD will likely result in an increase from Q4'21's 69%. On the EBIT margin and net earnings levels, we expect margins of 33% (26%) and 27% (24%). Finally, we estimate a '22e dividend per share of SEK 5.00 (104% of '22e EPS) to be announced in the Q4 report.

Länk till analysen i sin helhet: https://cr.abgsc.com/foretag/sintercast/Equity-research/2023/1/sintercast---solid-23e-24e-growth-prospects-but-lower-fx/