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On Tuesday, UBS analysts initiated coverage on Indutrade AB (INDT:SS), a global serial acquirer based in Sweden, with a Buy rating and a price target of SEK 400. The firm’s analysts project that Indutrade will experience a compound annual growth rate (CAGR) of approximately 14% from 2025 to 2027 in revenue, with an expected boost from efficiency measures and a recovery in the construction sector anticipated in 2026. This growth is forecasted to translate into a more than 20% increase in EBITA CAGR over the same period.
The analysts highlighted Indutrade’s track record of delivering a 12% revenue growth from 2014 to 2024, crediting the company’s continuous flow of acquisitions and its diverse portfolio for its ability to mitigate the impacts of economic downturns. Indutrade has recently unveiled a new divisional breakdown and efficiency measures, which have been praised for enhancing transparency through improved disclosure.
Furthermore, UBS analysts noted that Indutrade has consistently improved its EBITA margins by approximately 360 basis points from 2017 to 2024, reaching 14.4%. Despite these gains, they believe there is still room for margin improvement when compared to the average for Swedish serial acquirers, which is around 17% to 18%.
The company has a history of financing mergers and acquisitions through its cash generation, with a historical cash flow per share to earnings per share ratio of around 110%. In addition to its growth strategy, Indutrade offers investors an attractive dividend, maintaining a payout ratio of about 40% per annum.
UBS’s positive outlook is based on the company’s ability to grow revenues through both organic measures and acquisitions, as well as the anticipated recovery in the construction sector, which is expected to contribute to the company’s financial performance in the coming years.
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