Jefferies ups Munters to 'buy' on positive market trends

Munters AB

24/04/2023 09:38

** Jefferies upgrades Munters  MTRS.ST  to "buy" from "hold"
and raises price target by 47% to SEK 115, as it expects the
dehumidification and cooling solutions maker to gain from
favourable global market trends
    ** These trends include digitisation, electrification, and
increased focus on sustainability, it says
    ** The brokerage sees three-year sales compound annual
growth rate of 14% in 2022-2025 and an increase in adj. EBITA
margin from 10.3% in 2022 to 13.5% in 2025
    ** This is driven by continued growth in data centre tech
and battery divisions following major contract wins, Jefferies
says
    ** It adds "service opportunity is significant" and could
lead to further margin improvement and higher valuation multiple
    ** Jefferies also flags M&A optionality given the group's
low leverage and the fragmented nature of its key end-markets
    ** The broker says current valuation offers an attractive
entry level to company with "above-average growth potential and
achievable profitability improvement prospects"
    ** Out of six analysts that cover Munters, five rate it
"strong buy" or "buy" and one "hold"

 (Reporting by Marta Frackowiak)
 ((marta.frackowiak@thomsonreuters.com))