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Pricer: Strong Q3 sales expected, but soft GM - ABG

Q3 report due Friday, 22 October
Q3e sales and orders of SEK 426m and SEK 360m
Negative revisions due to increased freight costs

We believe that demand for ESL solutions remains strong, supported by strong order intake in H1 for both Pricer and its largest competitor, SES-Imagotag. Both companies ended Q2 with strong order books, which supports H2 growth. Although Pricer only announced one order in Q3 (a framework agreement with Canadian Castle Building Centre through its partner JRTech Solution), we expect it to deliver Q3 sales of SEK 426m (-25% y-o-y against tough comps), fuelled by its Q2 order book of SEK 563m. We forecast Best Buy sales of SEK 50m (12% of Q3e sales), and “underlying” sales (excl. Best Buy) of SEK 376m.

The current issues are external factors that eventually will subside. We remain confident that the ESL market will progress well over the coming years and that Pricer is well-positioned to benefit from these trends. As such, we leave our 2023 estimates largely unchanged but cut ‘22e EBIT by 5% due to the above-mentioned reasons. The share price is down -26% YTD vs. OMXSGI at +29%. On our new estimates, we see a valuation of 30-14x ’21-‘23e EV/EBIT.
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