Pareto cuts Hexatronic to 'hold' as valuation reflects growth prospect

Hexatronic AB

12/12/2022 09:56

** Pareto Securities downgrades Hexatronic  HTRO.ST  to
"hold" from "buy", saying the current valuation is close to
reflecting the growth prospect of the Swedish electronic and
technical solutions producer
    ** The brokerage notes the group's revenue growth and margin
expansion came "significantly above market expectations" in Q2
and Q3, but says the "market is already incorporating a
best-case scenario for the share"
    ** It says the stock is trading with a PE ratio of 32x on
2023 estimates, calling it a "rich valuation", motivated by
expectations for continued strong earnings growth
    ** Considering this, Pareto views the risk/reward profile
"unattractive", particularly if entering weaker equities market
    ** The stock falls around 8% in morning trade, among the
worst performers on the pan-European STOXX 600 index  .STOXX 
    ** Including Monday's fall, the shares are up 50%
year-to-date
 (Reporting by Greta Rosen Fondahn)
 ((Greta.RosenFondahn@thomsonreuters.com))