UBS ups Assa Abloy to 'buy' on Americas potential

Spectrum Brands Holdings

19/12/2023 13:02

** UBS upgrades Assa Abloy  ASSAb.ST  to "buy" from
"neutral", saying the world's biggest lockmaker's acquisition of
Spectrum's  SPB.N  hardware and home improvement (HHI) division
is turning into a clear positive
    ** "We see scope for Assa's Americas business to deliver
22.5%-23% operating profit margin performance on a 3-year view
as the HHI business is fully integrated and $100m targeted
synergies come through," the broker says
    ** UBS raises TP by 22% to SEK 330 for the Swedish company,
and says it sees a 300 bp upside to the Americas division's
profitability vs consensus post full integration of HHI
    ** The broker expects recovery to kick in by mid-2024,
largely driven by the company's residential activity in the U.S.
and resilient non-residential exposure
    ** Out of 22 analysts that cover the stock, nine rate it
"strong buy" or "buy", 11 "hold" and two "sell" or "strong sell"
- LSEG

 (Reporting by Elsa Ohlen)
 ((elsa.ohlen@thomsonreuters.com;))