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Investing.com - UBS initiated coverage on Swedish medical equipment manufacturer Elekta AB (ST:EKTAB) with a Sell rating and a price target of SEK34.00 on Wednesday.
Elekta, the world’s second-largest manufacturer of radiotherapy devices, accounts for 40% of group sales, with the remainder coming from software and services, according to UBS.
The investment bank’s analysis suggests that market growth is slowing in the radiotherapy sector, despite Elekta management presenting its new Evo platform as a potential competitive turning point after a decade of market share losses to industry leader Varian.
UBS expressed caution about the extent to which Evo adoption can counteract what it describes as structural headwinds in the market, based on early data from its research.
The firm believes consensus earnings estimates for Elekta are 9-19% too high and projects approximately 30% downside potential from current levels, despite the stock already having declined 20% year-to-date.
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