Fundamental view – is the margin lift likely to hold?
Gabriel Holding’s Q3 figures (DKK 390.1 mn revenue, +7% YoY) are respectable for a mature industrial player, but the headline driver of optimism is the jump in EBIT from DKK 11.9 mn to DKK 31.7 mn – a more‑than‑doubling of operating profit that lifts the EBIT margin from roughly 3 % to about 8 %. The upside stems from a mix of modest top‑line growth, disciplined cost‑management and the “continuing‑operations” carve‑out that strips out legacy, lower‑margin assets. If the company can keep the cost base flat while revenues continue to climb 5‑8 % per quarter, the margin expansion is technically sustainable for the next two‑to‑three quarters. Key risks are (i) a slowdown in the construction‑materials market that would choke revenue growth, (ii) any reversal of the recent procurement‑efficiency measures (e.g., higher raw‑material pricing or labor costs), and (iii) the integration of any new acquisitions that could dilute the current margin profile. Management’s guidance in the upcoming August 28 release – especially the forward‑looking EBIT margin guidance and commentary on input‑cost trends – will be the decisive catalyst.
Technical & trading implications.
Gabriel’s shares have been trading in a modest up‑trend since the FY‑24/25 outlook lift, with the price holding above the 50‑day moving average and testing a prior resistance around DKK 140. A breakout above that level, coupled with the upcoming earnings announcement, could trigger a short‑term rally to the next resistance near DKK 155, offering a 7‑10 % upside on current levels. Conversely, a miss on margin guidance or a disclosed cost‑inflation head‑wind would likely see the stock retest the 50‑day MA (around DKK 125) and could open a pull‑back to the 20‑day MA (≈ DKK 115). Actionable signal: consider a small‑to‑moderate long position on a pull‑back to the 50‑day MA with a stop just below DKK 120, targeting the DKK 140‑155 zone, while keeping a tight watch on the Q3 release for any margin‑guidance deviation. If the guidance confirms a sustained 8 %+ EBIT margin, a scale‑in on the breakout would be justified; if guidance signals margin compression, shift to a defensive stance or consider a short‑term hedge.