Troax's margin recovery to take years - Berenberg cuts to 'hold'
BUZZ-Troax's margin recovery to take years - Berenberg cuts to 'hold' ** Berenberg downgrades Swedish mesh panel maker Troax TROAX.ST to "hold" from "buy" as it sees market expectations for profitability improvements as overly optimistic
** The brokerage expects the automotive end-market to remain a headwind and notes the company's margin recovery will "take years rather than quarters"
** The broker notes a sequential orders decline from Q4 to Q1, weighed down by the automotive segment, and expects the transfer of U.S. factory production to continue weighing on Q2 deliveries and profitability
** Berenberg adds that corporate leverage is increasing following recent acquisitions, leaving limited financial capacity for further purchases in the near term
** The broker lowers its PT by 27% to SEK 120; it cites several years of weak execution despite a positive revenue surprise from acquisitions
(Reporting by Marta Frackowiak)