Elekta's Margins Continue to Struggle, but Demand Looks Improved

Elekta's fourth-quarter and full-year results were a mixed bag, with orders rebounding strongly in EMEA but still fairly weak elsewhere. Margins also continue to be a challenge for the company. We are updating our model for the full-year results, and while the company's performance has been below our expectations, particularly on the margin line, we anticipate most of the underperformance will be offset by the time value of money. We maintain our wide moat rating but continue monitoring Varian's performance within Siemens Healthineers for any signs of structural changes in the space. Shares are attractive at current levels.