Elekta (EKTAB SS) Sweden

Healthcare

Willis Welby

Median consensus Y3 revenue growth for Willis Welby’s mid cap MedTech coverage remains high at 7.3%, but financial productivity is not generally impressive and with a median implied to Y3 EBITM ratio of 145, expectations are almost all too high. However, EKTAB is one stock that does look particularly attractive. Willis Welby likes the product lines here as well as the financial productivity. And this is a standout cheap share (the implied to Y3 EBITM ratio is in the 50s - significantly below sector peers). Yes, investors should be wary of lumpy orders and delivery, but the positive share price reaction to disappointing numbers recently confirms just how nervous the market is. 50%+ upside.

- 08 March, 2024

Midcap Medtech & Staples have performed well but both look challenging

Willis Welby

The share price performance for Willis Welby’s Medtech group has been startling YTD (+23.8%), but revisions are not impressive (the median move in consensus Y2 EBIT over the last 3 months is now a CUT of 1.8%), they have problems with financial productivity and levels of implied to Y3 EBITM ratios are very demanding. Willis Welby highlights Elekta and COMET but cannot make their maths work elsewhere. Financial productivity is also an issue in their Staples coverage and the median consensus Y3 revenue growth number is just 2.8%. Expectations ratios are not as extreme as Medtech's but are still demanding. Glanbia still makes sense, but they struggle elsewhere.

- 12 May, 2023