In this equity research report, Analysts Gabriel Koorits and Mandy Sy take a closer look at ITAB Shop Concept AB (ITAB), a European market leader in in store solutions and retail technology. Following the acquisition of HMY Group, ITAB has doubled the revenue base and market share from 6% to 12% in a fragmented industry. The combined entity is positioned to deliver SEK 330m in recurring EBIT synergies through cost savings and cross selling, with an additional uplift expected from favourable product mix. Analysts forecast EBIT margins to expand from 5.7% LTM to 9.1% by 2027E and ROIC to rise from 9% to 16%, driven by strong capital efficiency. Despite an improved earnings outlook, ITAB trades at a low valuation of 6.6x EV/EBIT 2027E compared to the peer median of 9.0x. A blended valuation using a 70-30 DCF and peer multiple approach yields a target price of SEK 39, implying an upside of 65.5%.
Investment Thesis
● Fragmented market positions ITAB as a consolidating leader with pro forma 12% market share and a strengthened global presence
● Post-acquisition scale unlocks SEK 330m in EBIT synergies and supports margin expansion through cost optimization, cross selling, and product mix shift
● Valuation disconnect offers re rating potential, as the market currently prices in flat margins despite clear operational leverage and synergy visibility