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On Monday, Berenberg raised the price target for Hexagon AB (HEXAB:SS) (OTC: HXGBF) to SEK115.00 from the previous SEK105.00, while keeping a Hold rating on the stock. The adjustment follows Hexagon’s announcement of better-than-expected results for the fourth quarter of 2024, which were disclosed on January 31.
Hexagon achieved a modest organic, currency-adjusted top-line growth of 1% in Q4, which, despite being slight, was welcomed as a positive development after two consecutive quarters of negative growth. The growth was largely attributed to the Asset Lifecycle Intelligence (ALI) segment, which saw a 10% year-over-year increase. Nevertheless, the company’s core segments, Geosystems and Manufacturing Intelligence (MI), did not perform as well, both recording a 2% decline in the same period.
The analyst noted the ongoing challenges in Hexagon’s primary end-markets, pointing out that the construction industries are still awaiting a substantial recovery in business activities, and the manufacturing industries, particularly automotive and Europe, continue to show signs of weakness.
The revised price target reflects recent acquisitions made by Hexagon and updates the valuation to include forecasts extending into 2026. Despite the cautious stance, Berenberg acknowledged the potential for positive developments in the near future, including the appointment of a new CEO in July, the introduction of new products, and the anticipated update on the potential spin-off of the ALI segment in April. However, the analyst suggested that these potential catalysts might already be factored into the stock’s year-to-date price movement, which has seen an approximate 19% increase.
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