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Tempest: Growth and margins in place - SEB

Ahead of Tempest’s Q3 report (due 24 November), we raise 2023E-24E EBITDA by 1-2%, based on a more positive outlook on demand for tech-enabled security services, which has better margins than traditional guarding services. We expect the recent acquisition of DSS to be a major contributor to profits in Q3, together with cost savings. We reiterate our DCF-based mid-point of SEK 44 per share, corresponding to 10.5x 2023E EV/adj. EBITDA.

Ahead of Tempest’s Q3 report (due 24 November), we raise 2023E-24E EBITDA by 1-2%, based on a more positive outlook on demand for tech-enabled security services, which has better margins than traditional guarding services. We expect the recent acquisition of DSS to be a major contributor to profits in Q3, together with cost savings. We reiterate our DCF-based mid-point of SEK 44 per share, corresponding to 10.5x 2023E EV/adj. EBITDA.
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