Berenberg starts Troax with 'buy', cites growing safety solutions demand

Troax AB (publ)

10/04/2024 08:53

** Berenberg initiates Troax  TROAX.ST  coverage with "buy"
and a TP of SEK 300, saying the Swedish mesh panel producer
benefits from the increasing demand for safety solutions 
    ** Shares grow 6.1% as of GMT 0752
    ** The broker expects Troax' end-markets to grow by at least
5% in the mid to long term, owing to the increasing use of
industrial robots, automation of warehouses 
    **  Troax is three times larger than its closest competitor
Axelent (private owned), which enhances efficiency in a
fragmented industry, Berenberg adds
        ** "The trend over the last half decade is that
blacksmiths are losing market share to the larger companies", it
notes
  
    ** Based on the company's development to date, Berenberg
expects Troax to grow by a 11% CAGR from 2023-2026 and maintain
high operating margin of about 20%
    ** The broker also expects a 50% payout ratio of dividends
based on strong balance sheet
    ** Out of 5 analysts covering Troax, two rate the stock
"buy" and three rate it "hold"
    

 (Reporting by Anna Chaberska)
 ((Anna.chaberska@thomsonreuters.com))