On Monday, Deutsche Bank (ETR:DBKGn) initiated coverage on Elekta AB (EKTAB:SS) (OTC: EKTAF), a global leader in the radiotherapy solutions market, with a Hold rating and a price target of SEK70.00. The firm cited concerns over the company's short-term market visibility and challenging market conditions that may impact capital expenditures in hospitals and the medtech sector.
According to Deutsche Bank, Elekta's recent fourth-quarter results were disappointing and signal limited visibility on short-term developments in its end-markets. The company also indicated a more challenging market environment ahead, with potential weakness in hospital and medtech capital expenditures.
The analysis by Deutsche Bank further highlighted that Elekta is facing a year that is back-end-loaded with growth and margins due to anticipated costs related to product launches in the first half of the fiscal year 2024. These factors contribute to the uncertainties surrounding the company's performance.
Despite these challenges, Deutsche Bank views the current valuation of Elekta at 13 times its estimated 2025 earnings per share as fair. The Hold rating reflects a cautious outlook on the stock, balancing the company's position as a pure-play leader in a growing market against the immediate hurdles it faces.
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