SAAB Earnings: Strong Results With Sales Outlook Upgrade; We Raise Fair Value Estimate to SEK 1050

Wide-moat SAAB reported strong results for first-quarter 2024, driven by order momentum and SAAB's capacity expansion as the company increased its 2024 sales outlook 15%-20% from 12%-16%. We increase our valuation from SEK 860 to SEK 1,050 to incorporate management's guidance and account for increased long-term growth. We're increasing our long-term growth rate from 3% to 5% to account for an acceleration of European members' commitment to increasing their defense spending. Overall, the latest industry estimates show a cumulative increase of over $500 billion for the next decade compared with last year's predictions.