JPM cuts Elekta's price target amid growth concerns

Elekta AB (publ)

30/05/2025 10:37

** J.P.Morgan cuts target price on Swedish medical technology company Elekta EKTAb.ST to SEK 47 from SEK 57 and keeps "underweight" rating, pointing to increased uncertainty around growth and margins

** Elekta reported its Q4 numbers on May 28, which moved company shares up 6%

** "The call actually managed to increase uncertainty in the outlook, with management unwilling to provide much quantitative guidance and seeming to pull back from the margin improvement guidance that was indicated in the press release," says JPM

** Q4 orders down 7% at constant exchange rate despite new product releases

** Broker cuts 11% off FY25/26E adjusted EBIT on lowered CER growth and foreign exchange headwinds to margins

** JPM expresses concerns rise over Elekta's shift from internal to external research and development, questioning the financial implications

** Broker mentions 1 billion SEK ($104.34 million) impairment charge and says it might lower future amortization costs by about SEK 100 million per year, which helps margins

** But also underlines that new tariffs can reduce margins by around 60 basis points or possibly more due to exposure to China

** Elekta shares down 2.9% at 08:42 GMT

($1 = 9.5841 Swedish crowns)

(Reporting by Agnieszka Olenska)

((Agnieszka.Olenska@thomsonreuters.com;))