In this financial report, analysts Elias Borg and Benjamin Holmén take a closer look at GARO Group (GARO), the Swedish developer and manufacturer of electrical installation components and electric vehicle chargers. The analysts expect revenue growth of 46% between 2021A-2023E. This is driven by underappreciated synergies, substantial market growth and a strong brand. Based on a peer and historical analysis, equally weighted, a target EV/EBIT of 26x is justified – implying a price per share of SEK 138.6, and a potential upside of 24.4% by 2023E.
Investment highlights:
- Charging infrastructure is the major bottleneck holding back EV adoption. As European countries seek to expand their charging networks, GARO is well positioned to grow sales.
- Cross-segment synergies will allow GARO’s Electrification segment to take market share as a growing portion of the total Electrification market will consist of charging infrastructure.
- GARO’s strong brand has allowed for superior margins to competitors. The analysts conclude this is unlikely to change.