RBC initiates Assa Abloy at 'outperform' on accretive M&A strategy
BUZZ-RBC initiates Assa Abloy at 'outperform' on accretive M&A strategy ** RBC Capital Markets initiates coverage of Swedish lock maker Assa Abloy ASSAb.ST at "outperform" with a PT of SEK 400 citing a highly accretive bolt-on acquisitions strategy
** The brokerage notes that about two-thirds of the firm's sales growth excluding currency impacts since 2004 has come from mergers and acquisitions in a fragmented industry
** A geographic shift towards North America and rapid growth in the datacentre market lift trend growth potential and support higher adjusted earnings margins by 2027
** Trading near a record discount to the industrials sector the company also boasts an impressive average free cash flow return on invested capital of over 11%
** RBC adds that "Assa has by far the best volatility-adjusted FCF profile among peers" highlighting its consistent double-digit free cash flow compounding for 20 years
** Out of 22 analysts that cover Assa Abloy, 14 rate the stock "strong buy" or "buy, "eight rate "hold" and no analysts rate the stock "strong sell" or "sell" - LSEG data
(Reporting by Agnieszka Olenska)