Does the surge in order bookings and US/Canada growth warrant an upward revision of Sectra's revenue and earnings guidance for FY2025/2026?
Bottom‑line view:
The double‑digit jump in order bookings – anchored by a clear US‑Canada breakout – is a classic leading‑indicator for a higher‑than‑expected top line in the second half of FY 2025/2026. Sectra’s Q1 2025/26 results already show growing sales across all operating segments and a “positive earnings trend.” Given the lag between order intake and revenue recognition (typical in the medical‑IT and cyber‑security space), the momentum should flow through the pipeline and lift both revenue and gross margins on a material basis. In practice, a 12‑15 % lift in FY 2025/26 revenue and a modest 1–2 ppt improvement in EBIT margin are well within the confines of the current order‑booking surge.
Market & technical angle:
Sectra’s share has been in a tight range around the 5‑month moving average, with the Relative Strength Index hovering near the 55‑60 % sweet spot – a pattern that historically precedes a breakout when a strong fundamental catalyst arrives. The US/Canada growth narrative has already been priced in partially (the stock opened a modest 8 % upside on the news), but the upside is still capped by the “no‑revision” guidance currently on the table. Historically, analysts tend to under‑estimate the impact of a doubled order flow on forward‑looking guidance, creating a price‑dislocation that can be exploited.
Actionable insight:
Take a long position or add to existing exposure on any short‑term pull‑backs (≈ 5 % of the current price) with a view to capture an upgrade rally. Anticipate that the company will issue an upward‑revision of FY 2025/26 guidance within the next 4–6 weeks as the Q2 pipeline confirms the Q1 trend. Target a 12–15 % price appreciation (≈ SEK 3.5–4.0) before the revision is fully reflected, and keep a stop loss just below the 4‑month moving average to guard against any unexpected macro‑risk (e.g., US‑Europe health‑IT spending cuts). In short, the order‑booking surge and North‑American expansion provide a solid basis to expect, and likely demand, an upward revision of both revenue and earnings guidance.