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Investing.com - Morgan Stanley initiated coverage on Kongsberg Gruppen ASA (OL:KOG) with an Equalweight rating and a price target of NOK270.00.
Kongsberg Defence & Aerospace (KDA) represented approximately 40% of group sales and 45% of profitability in 2024, according to Morgan Stanley. The division benefits from strong performance in Defence Systems and Missile Systems activities, which account for 22% and 13% of group sales respectively.
The research firm notes Europe has significantly fewer air defence systems than China and Russia combined, estimated at 10 times lower. Kongsberg holds a leading position in European air defence systems with approximately 45% market share and a backlog covering up to three years of sales.
Morgan Stanley highlights that missile system production capacity in Europe is five times lower than Russia’s. Kongsberg has seen growing interest in its missile systems, receiving 12 orders in just two years compared to only two orders in the previous 20 years.
Despite expectations that Kongsberg’s production will increase by 50%, Morgan Stanley believes these growth drivers are already reflected in the current share price, with limited upside potential to consensus estimates.
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