ASSA B: Modest Price Objective Increase Will Support Balanced Fair Outlook

ASSA ABLOY's analyst price target has been raised modestly, supported by analysts citing steady revenue growth, resilient profit margins, and a slightly higher future earnings multiple that together underpin fair value estimates in the SEK 340 to SEK 350 range.

Analyst Commentary

Recent target increases from multiple firms point to a cautiously constructive stance, with bullish analysts acknowledging solid execution while still framing the stock as fairly valued rather than compellingly mispriced.

Bullish Takeaways

• Bullish analysts cite sustained organic growth and pricing power as key supports for nudging valuation multiples higher within the SEK 340 to SEK 350 range.
• Incremental target increases reflect confidence that management can continue to execute on cost discipline and mix improvement, preserving margins despite a mixed macro backdrop.
• Upside scenarios focus on ongoing digital and electronic lock penetration, which is seen as a structural growth driver that justifies modestly higher long term earnings assumptions.
• The clustering of targets near SEK 350 is viewed as evidence that consensus is gradually re-rating the group’s earnings quality and cash flow visibility.

Bearish Takeaways

• Bearish analysts maintain neutral-style ratings alongside the higher targets, signaling that, at current levels, much of the near term improvement in margins and growth is already reflected in the share price.
• There is caution that any slowdown in non-residential construction or delayed security projects could pressure volume growth, limiting further upside to earnings estimates.
• Some see the risk that integration and execution around acquisitions will need to remain flawless to support the elevated valuation framework, leaving little room for operational missteps.
• With targets only modestly above the prevailing trading range, potential upside is considered incremental rather than transformational, keeping sentiment balanced rather than strongly positive.

Valuation Changes

• Fair Value: unchanged at approximately SEK 373.35 per share, indicating no net shift in the intrinsic value estimate.
• Discount Rate: risen slightly from about 6.68 percent to 6.73 percent, reflecting a marginally higher required return in the valuation model.
• Revenue Growth: increased very modestly from roughly 7.05 percent to 7.06 percent, signaling a small upgrade to long term top line expectations.
• Net Profit Margin: effectively unchanged, moving fractionally from about 11.42 percent to 11.42 percent, leaving margin assumptions stable.
• Future P/E: edged up slightly from around 23.37 times to 23.40 times, implying a marginally higher valuation multiple applied to forward earnings.