Technology

Report by Willis Welby

SES continues to look like a strong company with sensible rates of growth, good finances and high levels of financial productivity. Management is also clearly excited by prospects in a world of rapid technological innovation and they recently outlined detail of the targets for 2027 and 2028 which involve continued premium revenue growth along with higher margins. But markets seem to have missed most of this. The implied to Y3 EBITM ratio is only 35. If everything works as it ought to then Willis Welby can still see 100% upside.

Technology

Report by Willis Welby

Revisions across Hardware, Semis and Telco Equipment stocks are poor and getting worse. The median move in consensus Y2 EBIT over the last 3 months is now a cut of 6.0%. There is a wide range of expectations, but median consensus Y3 revenue growth is a remarkable 13% and there are stocks that look to be decent growth and serious value. SeSa stands out. The stock could treble. Meanwhile, Internet and IT Services is the low growth piece of Willis Welby’s Tech coverage. Consensus Y3 revenue growth is only 6.0%, but the median implied to Y3 EBITM ratio is just 49 and revisions remain positive. Indra Sistemas looks interesting. Trading has been good. There is potentially a massive transformation. Finances are strong and the implied to Y3 EBITM ratio means they can see upside of over 100%.

Technical Analysis

Report by Messels

Recycling and Renewable Energy stocks such as Umicore, Vestas Wind and Siemens Gamesa are rallying from medium term support. Selective Seafood and Tobacco stocks remain defensive including SalMar, Mowi and Scandinavian Tobacco. Banks are generally rallying in ranges; favours CaixaBank and Sabadell which have already broken out and extend relative bases.

Industrials have broken uptrends and are now losing relative momentum such as Schneider, Atlas Copco and Alfa Laval. Luxury Goods renew their 4-month price and relative tops including Pandora, LVMH, Dior and Hermes. IT Hardware and Semiconductors renew their 5-month price and relative tops; SeSa, BE Semiconductor, Infineon and Nordic Semiconductor are highlighted.