In this equity research report, analysts Marcus Kerschner and Erik Holst take a closer look at
Firefly, a Swedish company that offers fire protection solutions for process industries. Due to
extensive regulations on fire safety and the increasing cost of production stops for industries, the
demand for preventive fire solutions is becoming more substantial. Therefore, revenue is
estimated to grow at a CAGR of 23.0%, and EBIT margin is expected to rise from 12.2% to
15.1% between 2023A and 2025E. The target price of SEK 287.0 is based on an equally
weighted average between a DCF and a peer valuation and implies an upside of 28.7%.
Investment Highlights
- Firefly is set to benefit from stronger incentives to mitigate production stops
- Ripple effect, stronger bargaining power and flexible production are set to drive margins
- Firefly is well positioned to capitalize on upcoming investments due to ATEX regulations