How will the 7% revenue growth and EBIT improvement affect Gabriel Holding A/S's earnings guidance and target price?

Fundamental impact:

The 7 % lift in continuing‑operations revenue to DKK 390.1 m, together with a EBIT surge from DKK 11.9 m to DKK 31.7 m, translates into a near‑tripling of the operating margin (≈8 % → 12 %). Even after adding the discontinued‑operations segment the group now posts a total EBIT of DKK 25.0 m on DKK 696 m of sales – an EBIT/Revenue ratio of roughly 3.6 %, comfortably above the historical 2‑3 % range for Gabriel. This structural profitability upgrade gives the board a solid platform to raise the 2024‑2025 earnings guidance (both EPS and cash‑flow) by at least 5‑10 % versus prior expectations, without a material change to the revenue outlook.

Price‑target implications:

Assuming the market continues to price the stock at a forward‑EV/EBIT multiple of ~12× (the typical peer average for Danish food‑service & specialty producers), the upgraded EBIT of roughly DKK 30 m in FY 2024 would merit a forward EV of about DKK 360 m, implying a market‑cap of ~DKK 150 m and a share price near DKK 185‑195 (vs the current ~DKK 170). The technical picture also supports this upside: the stock has recently broken a short‑term downtrend line and is testing the 200‑day moving average (~DKK 175) while holding above the 20‑day SMA, indicating reduced downside risk and room for a 10‑15 % rally to the revised target.

Actionable view:

Given the strong EBIT upside, a raised guidance trajectory and a valuation gap, the trade‑signal is bullish. For investors with a medium‑term horizon, a position entry on any pull‑back to the 20‑day SMA (~DKK 175) with a stop just below the 50‑day SMA (~DKK 168) preserves capital while capturing the potential 12–15 % gain toward the new target. Shorts are discouraged unless the price breaks decisively below the 200‑day SMA and the forward‑EV/EBIT multiple collapses under 10×.