Berenberg starts Engcon with 'buy' on tiltrotator growth opportunity

Engcon AB

12/03/2024 07:25

** Berenberg starts coverage of Engcon  ENGCONb.ST  with a
"buy" recommendation and a PT of SEK 105, seeing the Swedish
equipment manufacturer capitalizing on global growth
opportunities as it expands the reach of its tiltrotators
    ** "Engcon is the global market leader in the manufacturing
of tiltrotators, an attachment that gives a construction
excavator wrist-like capabilities," says the broker
    ** It predicts a significant increase in demand for the
company's tiltrotators outside its primary market in the
Nordics, suggesting an upside of approximately 35% to its
current share price (SEK 78.60)
    ** Berenberg notes that while tiltrotators are popular in
the Nordics, with market penetration surpassing 85%, their
adoption elsewhere is still in the single digits
    ** "That will change, in our view. Engcon has grown sales
outside the Nordics at a 36% CAGR during 2019-2023 and the
potential for continued growth is huge," the broker adds 
    ** It expects a recovery in the Nordic region (which
accounts for 43% of sales) to enhance Engcon's revenue from 2024
to 2027

 (Reporting by Jesus Calero)
 ((Jesus.calero@thomsonreuters.com))