DNB Markets - IAR Systems: Multiples compression post-results
The Q3 results marked the second consecutive ‘clean beat and raise’, where multiples has compressed as we have increased our 2023–2024e adj. EBIT by 29–13%, while the stock gained 18% today. Although small-caps generally remain out of favour, we believe IAR is in the best shape operationally in the six years we have covered it. Having trimmed the cost base, we expect 42% growth in EBIT YOY in 2024 via self-help measures, while buybacks should counter its decade-low multiples. We have raised our fair value to SEK140–210 (130–210).Inspiring Q3, with adj. EBIT 65% above our forecast. Q3