Well, well.
Kauppalehti article on the topic without a paywall. Hopefully a deal will be struck. I’ve missed those big deals during the time I’ve owned this company (the equivalent of one washer for a Gripen wheel bolt, but I’m an owner too 
)
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Saab has won a procurement competition for disposable shoulder-fired weapons in the USA:
“The Pentagon’s daily contracting announcement today includes a firm-fixed-price award valued at $494,350,000 to Saab Inc. for an unspecified number of XM919s”
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Well then. Interesting. Down nearly 10% today for this reason.
It was toughest for Saab, which retreated the most with a 9.3 percent drop after Bank of America downgraded its buy rating to neutral and revised the target price to 240 kronor from 265 kronor. The bank believes that Saab’s strong performance expected for 2024 will be difficult to repeat next year and predicts growth will slow down until 2027.
I don’t understand anything about anything, but in my opinion, there’s a sense of panic here, an overreaction.
And 10 minutes before the market closed, this news came out. I’ll put some highlights here. Unfortunately, nothing was said about kronor or dollars in this release.
Saab announces new munitions facility in Grayling, Michigan
In collaboration with the State of Michigan and the local community, Saab is creating high-quality jobs, increasing domestic production, and strengthening U.S. national defense.
Groundbreaking will take place in the final quarter of 2024, and the first manufacturing will begin in early 2026.
The Grayling facility will be Saab, Inc.'s 10th facility in the United States.
I’m waiting for tomorrow’s price reaction with interest. Usually, these releases come out in the morning, not 10 minutes before closing. Up or down. We’ll see. (Except that I’ll only see the reaction in the afternoon when I wake up. I don’t know if I should set a sell limit just in case, if it still dives. I’m so handsomely in the green that I wouldn’t want to lose my profits.)
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Saab has looked both technically and fundamentally quite weak to me for a while now. I actually sold my shares some time ago. A slowdown in growth is to be expected; European nations have already placed a significant volume of orders in the defense sector, and the money or the will for more may not necessarily be there. The stock price will also likely start pricing in potential ceasefire negotiations in the Ukraine war.
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I have no idea about Saab’s valuation multiples, but the company has stated that they aim for 15% organic growth per year. Due to long order and delivery cycles, the company has good forward visibility. Potential major contract wins, such as fighter jets, submarines, or surveillance aircraft, are not included in that 15%, meaning actual growth will be higher than that.
Sweden is a major customer and orders from there will increase as the budget rises:
According to information from IL, NATO’s new target is 2.5% of GDP, whereas the current target is 2%. When you add to this the security situation prevailing in Europe, the Middle East, and the direction of Taiwan, the demand for defense equipment should continue to grow significantly.
(this is not a buy recommendation)
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US Department of Justice requests information from Saab North America, Inc. regarding Brazil’s acquisition of Gripen fighter jets in 2014
Saab North America, Inc., Saab’s US subsidiary, has received a subpoena from the United States Department of Justice (DoJ). The DoJ has requested information regarding the Brazilian government’s acquisition of 36 Gripen E/F fighter aircraft for its air force. The contract was signed in 2014.The acquisition of Brazilian fighter jets (FX-2 program) took place between 2008 and 2014, and Saab was awarded the contract. Saab intends to comply with the request to provide information and cooperate with the DoJ in this matter.
Both Brazilian and Swedish authorities have previously investigated parts of the Brazilian fighter acquisition process. These investigations were concluded without any findings of wrongdoing by Saab.
Due to confidentiality obligations, Saab cannot provide further information on the matter.
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Strong performance continues without surprises.
Order bookings increased 41% and amounted to SEK 21,173m (14,977), driven by strong growth in Dynamics.
Organic growth was 17% and sales amounted to SEK 13,546m (11,527), with growth from all business areas.
Operating income increased 38% and amounted to SEK 1,187m (859), corresponding to an EBIT margin of 8.8% (7.5).
Net income increased to SEK 972m (656) and earnings per share amounted to SEK 1.79 (1.21).
Operational cash flow improved in the quarter and amounted to SEK 3,188m (-2,058), driven by large customer payments.
Net debt position was SEK 0.5bn (-1.4) at the end of the period.
The full year 2024 outlook on organic sales growth, EBIT growth and positive operational cash flow is reiterated.
According to the CEO, scaling is starting to show in the results; the company is investing heavily in building production capacity and automation.
Pareto Securities has raised its target price from 285 → 290 SEK.
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Expressen visited Saab’s production facilities in Karlskoga; something that indicates the growth rate is that every Monday, 15-20 new employees are waiting at the reception. There would be potential for even greater growth, but Saab would need assurance that orders will continue far into the future to dare to invest more in production.
Saab’s official Q4 will be released on 7.2, but preliminary data showed full-year 2024 sales growth of 23.4%.
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Saab year-end report 2024: Making steady progress on our profitable growth journey
Saab delivered a solid result, as expected. Sales growth forecast for next year 12-16%, dividend proposal SEK 2.00. (1.60).
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Saab will hire at least a thousand new employees in Sweden this year:
Saab has invested in new infrastructure and facility security. Investments in product development will not be compromised. The order book accumulation was advised to be viewed on an annual basis, as it is coincidental how orders fall into different quarters. The aerospace segment’s result is weakened by the delay in T-7 series production, but margins should be good in the series production itself. A Capital Markets Day is coming in May.
(video)
Hopes are still being held for a “shared pool” GlobalEye acquisition by Denmark, Sweden, and Finland, as “nordic” was specifically mentioned as an “interest” area. Here’s an article from Jan 25, with Finland’s problem presumably being the budget crisis.
“Next, Sweden awaits national decisions from Finland and Denmark on whether the countries will join the joint acquisition. According to Jonson, discussions are furthest along with Denmark.”
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For some reason, investors didn’t like it. -5%
I’m tempted to get back in myself. The stock price has been seesawing for about a year. It should start moving again soon, hopefully when they announce big orders.
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I noticed that forum members have started buying this for their portfolios. However, the discussion about Saab has remained very small.
So, welcome to discuss in this thread
Morningstar changed its recommendations quite radically.
Sell 262kr changed to buy 371kr, if I understood correctly.
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This has certainly surged quite a bit in recent weeks, along with the rest of Europe’s defense sector. We’ve been involved for a month.
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The share price will be boosted by the EU’s expected joint debt/other arrangement, NATO countries’ new defense budget target, and the assumed shift in procurement focus to some extent from the USA to European manufacturers.
Saab’s growth rate is currently limited by production capacity. New factories are being built and personnel are being hired, but due to the complexity of many products and long supply chains, there is a physical limit to ‘per year’ growth, regardless of the order backlog. Last year, revenue grew by 23.4%. It wasn’t long ago that the company announced a target of 5% growth per year.
Saab guides for 12-16% organic growth this year, which is exactly the same as what was forecast for 2024 12 months ago, so it is likely conservative. Saab’s P/E ratio at the time of writing is 40.91, Rheinmetall AG 84.75, and Kongsberg Gruppen 46.16, as seen on Nordnet.
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Saab has received an order from German company Taurus Systems
The order is valued at 1.7 billion Swedish kronor and the contract period covers the years 2025-2035.
The Taurus Kepd 350 has a range of over 500 kilometers.
SAAB: RECEIVES ORDER WORTH SEK 1.7 BILLION FOR THE TAURUS CRUISE MISSILE
STOCKHOLM (Nyhetsbyrån Direkt) Defense company Saab has received an order for maintenance and modernization of the Taurus Kepd 350 cruise missile. The order value is SEK 1.7 billion and the contract period covers the years 2025-2035.
This is stated in a press release.
The order concerns a comprehensive system upgrade and modernization of the German Air Force’s Taurus missiles, as well as ten years of lifetime maintenance, it is stated.
Saab has received the order from the German company Taurus Systems, which is jointly owned by MBDA Germany and Saab. The original order comes from the German procurement agency for defense materiel, BAAINBw.
The Taurus Kepd 350 has a range of over 500 kilometers.
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Pareto Securities has raised its target price from 290 → 435 SEK
Telegram:
“In the analysis, Pareto highlights that they believe the Surveillance and Dynamics business areas will be the main factors behind the growth.”
Prior to this, Carnegie 250 → 360 SEK and Morningstar 262 → 371 SEK
An analyst’s life is a constant game of catch-up.
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It is likely an exceptionally challenging situation for analysts, as the EU’s 800 billion defense package was only sealed last night.
It naturally remains to be seen how this will be implemented, but the probabilities are in favor of investments starting to grow significantly and manufacturers finding good backing to begin rapid expansions of production.
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Here is SalkunRakentaja’s article about Saab. 
A significant piece of information for Saab might also be that, according to the news service Finwire News, the Swedish pension insurance company AMF announced the possibility of investing in defense stocks. AMF’s largest holding is Investor, which in turn is Saab’s largest owner, so AMF has already indirectly invested in the defense industry.
Subheadings:
- Europe arms itself, Saab benefits
- Following a very strong earnings report
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https://www.is.fi/ulkomaat/art-2000011100716.html
Now, however, according to Minister Blair, it is being considered whether the remaining aircraft to be acquired should be F-35 fighters. According to Blair, alternatives for fighters could include, for example, Swedish Saab, which came in second in Canada’s fighter considerations. Blair also states that he has received a request from the Prime Minister to discuss with other manufacturers – especially those who would offer the possibility of assembling the fighters in Canada. Saab had at least offered such an option.
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Add to this Colombia’s potential Gripen acquisition (assembly in Brazil) and Thailand’s similar deal, and a good foothold will have been gained in these continents as well.
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