Handelsbanken upgrades Thule as easy comparables promise Q3 profit surge

Thule AB

26/06/2023 10:34

** Handelsbanken raises Thule  THULE.ST  to "buy" from
"hold" in the short term, expecting the Swedish outdoor
equipment maker's EBIT to surge in Q3 after a steep decline in
bike-related sales last year
    ** "Coupled with the very easy comparables that Thule will
start to meet from Q3 onwards, we expect strong near-term
momentum for the share," Handelsbanken analyst Karri Rinta says
in a note
    ** In Q3 2022, Thule reported an EBIT drop of more than 70%
yoy, citing rapid decrease in demand for bike products as global
stores reduced purchases due to high inventory levels
    ** As the destocking cycle nears completion, the broker
predicts Thule's Q3 earnings to exceed expectations with a 118%
yoy jump
    ** The company's pending CEO change warrants higher risk
premium, says the broker, keeping the stock's long-term
recommendation at "market perform"
    ** Handelsbanken raises its 2023-24 EPS estimates by 7-8% to
reflect continued decline in cost of plastics, freight and
transportation among others
    ** Out of seven analysts that cover Thule, three rate the
stock "strong buy"/"buy" and ​four "hold"

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