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Dist IT: Mortimer, we’re back - SEB

Ending 2020 on a high note, DistIT Group recorded Q4 organic growth of 7% and increasing gross margins (up 1.9pp y/y). Our investment case builds from continuing margin expansion, reflecting its private label and own brand sales strategy and operating cost management. We reckon EBIT margins could be closer to 7% in 2023. While our EPS estimates are largely unchanged (PER of 9x 2021), we raise our midpoint DCF value to SEK 105.

Ending 2020 on a high note, DistIT Group recorded Q4 organic growth of 7% and increasing gross margins (up 1.9pp y/y). Our investment case builds from continuing margin expansion, reflecting its private label and own brand sales strategy and operating cost management. We reckon EBIT margins could be closer to 7% in 2023. While our EPS estimates are largely unchanged (PER of 9x 2021), we raise our midpoint DCF value to SEK 105.
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