In this equity research report, analysts Adam Halsius and Arvid Johansson take a closer look at the Swedish window and door group Inwido (INWI). The analysts estimate an increased market growth as a result from the EU initiative, the renovation wave, that will result in a 8.9% CAGR revenue growth to 2024E. The Company is in a promising position to ramp up its M&A activity that were on hold during the pandemic. A equally weighted DCF and peer valuation, with a target multiple of 7.4x for 2023E in line with peer average, results in a SEK 173 target price.
Investment highlights:
- Energy regulations will increase sales of premium windows. Estimated 2023E gross margin to reach 60.1%.
- EU subsidies and regulations to drive above consensus top line growth of 8.9%.
- Strong balance sheet with ND/EBITDA at 0.7x and SEK 918mn of cash, capacity to acquire SEK 754mn of EBIT