Dignitana Q3: Stronger Conviction

Redeye comments on Dignitanas reported results from the third quarter of 2020. The company continued to show resilience also in the third quarter. The company continued to show growth compared to the same quarter last year and improved EBITDA as well. Given the uncertain situation due to Covid-19, this development must be seen as good, even though net sales were slightly lower than our expectations.

However, total revenues were higher than our expectations. We make small adjustments for the fourth quarter based on lower costs and slightly lower net sales than previously forecasted. Based on higher conviction for reimbursement in the US and a lower risk-free rate, we lower our WACC to 11% from 13%.

This changes our motivated value to SEK 15 (11) per share (Base Case), highlighting our long-term positive view for Dignitana.