Handelsbanken rates Securitas on Accumulate

02.11.2017 | 3 min lukea

Swedish bank Handelsbanken rates Swedish security company Securitas on Accumulate. The positive outlook for the market should remain into the next year. Organic growth is stronger than expected and the stock made a strong move upwards since its annual low in the beginning of September.

Handelsbanken predicts the security market to be strong in 2018. The demand for defensive qualities is growing and Securitas is in a good market position. The security market could grow by 3-4 percent in the U.S. and by 2-3 percent in Europe in 2018. Risk could be seen in inflation but Handelsbanken sees the company prepared well. A chance could be seen in incorporating technology into security solutions.

The need for more safety in North America and in Europe could increase the demand for security services. Companies in the markets for protection, surveillance and IT-security could be profiting from the growing demand.

Securitas with stable growth

Securitas third quarters organic growth of 5 percent beat average estimates of 4.1 percent. The North American market grew by 6 percent organically. In the fourth quarter a margin improvement could be seen. Securitas third quarter revenue increased by 1.5 percent on a year-over-year basis to EUR 2,370 million. EBITDA equals EUR 157 million respectively an EBITDA margin of 6.6 percent. The company reported an adjusted net income of EUR 82 million. Earnings per share equal EUR 0,23 which was an increase of 3.5 percent on a year-over-year basis.

At the moment Securitas shares are traded at EUR 14.93 (02.11.2017). The stock reached its annual high at EUR 15.60 (21.06.2017) and its low at EUR 13.18 (07.09.2017). 8 analysts rated Securitas on Buy, 4 on Hold and 9 on Sell. The 12-months target price is estimates with EUR 16.71. On top, Securitas has a current dividend yield of 2.46 percent. Securitas current market capitalization equals EUR 6,359 million. However the future development remains to be seen.

Securitas offers a broad range of security services

Securitas offers a wide range protective services for customers in a variety of industries and customer segments. The security solutions include on-site guarding, electronic security, fire and safety services and corporate risk management. Securitas has more than 335,000 employees in 53 countries and operates in North America, Europe, Latin America, Africa, the Middle East and Asia.

The further share performance is depending on different corporate-, industry- and economic factors. Investors should consider the risks in their investment decisions. It is possible that developments run different than investors expect them whereby losses could occur.

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