Negative EBIT estimate revision trend continues We lift ‘22e-‘24e sales by 1-2% following the better-than-expected Q2 deliveries. We continue to expect a strong ESL market in H2, and note strong growth for most ESL players in recent quarters. However, our positive sales revisions are offset by lower gross margins and increased opex assumptions, driving 20-12% cuts on ‘23e-‘24e EBIT.
Cost savings to support margins in 2023 On our new estimates, the share is trading at 18x ‘23e EV/EBIT vs. its L4Y f12m avg. of 21x. Although the outlook for when gross margins will stabilise is uncertain, we expect Pricer to grow rapidly in the coming years with a ’21-‘24e sales CAGR of 22%. Here, we think that Pricer’s growth will benefit well from the recent market launch of four-colour ESL. Furthermore, we see a tailwind to EBIT from its recently initiated cost-savings measures, which should come to fruition in 2023.
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