We increase ’21e sales by 11% on the Q2 beat, and ’22-’23 by 2%. This reflects higher growth assumptions for Phones, while we leave our Care sales estimate relatively unchanged. In terms of adj. EBIT, we increase our ‘21e estimate by 15% but cut our ‘22e forecast by 1% due to lower gross margin assumptions for Care.
Reinforced organic growth outlook for Care
We continue to see good growth prospects for Care, and the Q2 results have reinforced our view. In Sweden, Doro has recently won several new procurements, and we think that the UK market will show increased activity in H2 as more lockdowns ease. Although Doro has ceased its Phones operations in several markets (e.g. in the US and parts of Southern Europe), we now forecast 1% sales growth in 2021 driven by pent-up demand. At the current share price, Doro’s share is trading at 10x ‘21e EV/EBIT. With the NIBD ‘21e of 0.1x, we estimate that Doro still has plenty of M&A fire power. Although it is currently in process of divesting Care, we do not rule out any M&A announcements in H2.
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