Company Reports

Wide-moat Elekta's first-quarter results weren't impressive, but they were an improvement over the prior quarter's poor performance. Orders and gross margin improved sequentially but were still below our forecast levels. We're maintaining our fair value estimate and view the shares as undervalued.

We are maintaining our fair value estimate of SEK 127 for wide-moat Elekta despite the disappointing fourth-quarter results. The shortfall relative to our forecast is largely offset by cash flows realized since our last model update. We view shares as undervalued, but the disappointment reduces our confidence.

Demand for radiotherapy should stay healthy over the next decade. Elekta stands to benefit, but its success depends on the continuing adoption of Unity as well as its ability to withstand competition from Siemens Healthineers.

We are maintaining our fair value estimate of SEK 127 for wide-moat Elekta following the release of third-quarter results. We view shares as undervalued.

We are maintaining our fair value estimate of SEK 127 for wide-moat Elekta following the release of second-quarter results. We view shares as undervalued.

We are maintaining our fair value estimate of SEK 127 for wide-moat Elekta after incorporating recently released first-quarter results. We have also updated our medium-term forecast following the company's recent capital markets day that we attended, which gave us more confidence in the company's software offering. We currently view shares as undervalued.

Demand for radiotherapy should stay healthy over the next decade. Elekta stands to benefit, but its success depends on the continuing adoption of Unity as well as its ability to withstand competition from Siemens Healthineers.

We are maintaining our fair value estimate of SEK 127 for wide-moat Elekta following the release of fourth-quarter results. While the headline numbers look decent, with strong revenue growth and margin expansion, order growth isn't particularly impressive. We currently view shares as undervalued.

We are maintaining our fair value estimate of SEK 127 for wide-moat Elekta following the release of third-quarter results. After the first half of the year saw a decrease in gross order intake and net sales at constant-exchange rates, the third quarter rebounded with 9% and 8% increases respectively year over year. We currently view shares as undervalued.

We're likely to reduce our fair value estimate for wide-moat Elekta moderately following its second-quarter results release. The firm is seeing significant order growth deceleration across many of its markets and revenue growth is likely to fall short of our expectations due to coronavirus restrictions in China. We're also increasingly skeptical of the company's midterm outlook for margin expansion given recent challenges and the likelihood of a soft market environment in calendar 2023. Shares remain undervalued, but there are currently only limited positive developments on the horizon.

We are maintaining our fair value estimate of SEK 127 for wide-moat Elekta following the release of first-quarter results. North America continues to disappoint, with order growth, while affected by difficult comparisons, still below our expectations. On the margin, the company struggles with ongoing inflationary and supply constraint pressures, and announced another restructuring program to reduce its cost structure. We continue to view shares as undervalued.

Pandemic notwithstanding, demand for radiotherapy should stay healthy over the next decade. Elekta stands to benefit, but its success depends on its ability to commercialize Unity as well as withstand competition from Varian under Siemens Healthineers' roof.

Elekta's fourth-quarter and full-year results were a mixed bag, with orders rebounding strongly in EMEA but still fairly weak elsewhere. Margins also continue to be a challenge for the company. We are updating our model for the full-year results, and while the company's performance has been below our expectations, particularly on the margin line, we anticipate most of the underperformance will be offset by the time value of money. We maintain our wide moat rating but continue monitoring Varian's performance within Siemens Healthineers for any signs of structural changes in the space. Shares are attractive at current levels.

We are maintaining our fair value estimate of SEK 133 for wide-moat Elekta following the publication of full third-quarter results. Service revenue was the main driver of growth in the quarter with an increase of 7% organically year over year, though unable to completely offset the organic revenue decline of 8% for the products segment, resulting in a total organic revenue decline of 3% to SEK 3.6 billion. We currently view shares as undervalued.

We are maintaining our fair value estimate of SEK 133 for wide-moat Elekta despite the disappointing preliminary third-quarter results. Elekta’s Solutions segment posted a 9% decline in the quarter due to supply chain disruptions. The company expects that these challenges will persist into the second half of 2022. While we are planning to modestly reduce our 2022 revenue forecast, we don’t anticipate it to have a material effect on our fair value estimate. We currently view shares as undervalued.

We are maintaining our fair value estimate of SEK 133 for wide-moat Elekta following the release of second-quarter results. With the continuing global coronavirus pandemic recovery, total revenue and gross orders have returned to 2019/20 levels in the quarter, but the uncertainty around near-term growth remains material as we see the pandemic return. We currently view shares as undervalued.

Pandemic notwithstanding, demand for radiotherapy should stay healthy over the next decade. Elekta stands to benefit, but its success depends on its ability to commercialize Unity as well as withstand competition from Varian under Siemens Healthineers' roof.

Net sales for wide-moat Elekta grew 8% in constant currency year over year for the first quarter to SEK 3.009 billion, but operating costs reduced net profit by 42% to SEK 126 million. Management considers much of the supply-chain-related costs to be temporary. We are reviewing our assumptions and will be updating the model for the results and cash flows realized since our last update. Elekta is currently trading in 3-star territory.

We anticipate a modest increase to our fair value estimate for Elekta, largely due to cash flows realized since our last update, following the release of its fourth-quarter and full-year results. The company is starting to see a recovery across most of its end markets, mainly demonstrated in the order volume growth. Elekta's midterm revenue growth guidance was a bit lower than previously, which we expect to get more color on during the upcoming capital markets day. We maintain our wide moat rating for the firm.

We are updating our model following wide-moat Elekta’s third-quarter results, which was a mixed bag. Gross orders and total revenue continue to face headwinds from the coronavirus, and management stated that they expect COVID-19 headwinds to continue through the end of the fiscal year and into the summer. Shares are trading in 3-star territory.