RBC Tweaks Forecasts for Assa Abloy on 'Good' Q2 Execution; Outperform Rating Kept

05:00 AM EDT, 07/22/2026 (MT Newswires) -- RBC Capital Markets adjusted its earnings projections for Assa Abloy (ASSA-B.ST), highlighting the Swedish access systems company's "good" execution in the second quarter in "tough" market conditions. "Despite ongoing subdued conditions in a number of important end markets, Assa Abloy delivered 4% organic sales growth in Q2, along with healthy margin expansion and cash conversion. In our view, the combination of good execution against weak construction markets and a valuation hovering around a 10-year relative low is an attractive one. We have made limited changes to our EPS forecasts and maintain our Outperform rating and SEK400 price target," the research firm said Tuesday, noting the organic sales growth surpassed market expectations by 60 basis points. Within this context, analysts trimmed their full-year 2027 and 2028 group sales forecasts by 0.1% while leaving their 2026 sales estimate unchanged. RBC also raised its attributable net profit, basic EPS and adjusted EBIT assumptions for the same three years. "We continue to see Assa Abloy as a quality 'boring' stock that can deliver solid profit and [free cash flow] growth in a subdued market environment, and that does not materially rely on any of the 'growthier' themes in the cap goods space ([data centers], electrification, etc.). Critics will point out that until interest rate expectations move down again, Assa (and other non-DC construction plays) will remain out of [favor]. Nonetheless, we think Assa can compound FCF at a [high single-digit/low double-digit compound annual growth rate] through 2028, yielding an 11% [total shareholder return] even without re-rating," the note said.