Barclays on Thursday adjusted its stance on Hexagon AB and published initial coverage of Octave following the completion of Octave's spinoff from Hexagon. The bank downgraded Hexagon to "underweight" from "equal weight" and reduced its price target for the company to SEK 70 from SEK 95, a 26% cut. At the same time, Barclays set a $18 price target for Octave and began coverage at "equal weight."
The broker sharply trimmed its forecasted earnings for Hexagon. Barclays lowered its 2026 earnings-per-share estimate to 0.30 from 0.41, a 27% reduction, and cut the 2027 forecast to 0.32 from 0.45, a 29% decrease. For Octave, Barclays projected earnings per share of $1.39 for 2026 and $1.48 for 2027.
Despite the downgrade, Barclays said it "remain[s] constructive on Hexagon's underlying business, with strong competitive positioning, M&A optionality and potential upside from humanoid robots," but added that the current valuation "more than reflects the longterm opportunity."
Valuation and scenario analysis for Hexagon
Barclays placed a value of 17.75 billion on Hexagon's core operations, applying a 22x multiple to its 2027 estimated enterprise value to clean net operating profit after tax. Adding a 1.07 billion stake in Cadence and a 0.50 billion robotics option brought the enterprise value to 19.32 billion. After deducting 1.93 billion in net debt, the analysts calculated an equity value of 17.39 billion, which corresponds to the SEK 70 per-share target.
Barclays also provided downside and upside scenarios for Hexagon. In the bank's downside case the share price would fall to SEK 55, roughly 30% below the closing price cited in the report. The upside scenario was SEK 85, about 5% above the same closing level.
Octave outlook and growth assumptions
For Octave, Barclays expected existing-customer growth of 5.5% to drive annual recurring revenue (ARR) growth of 9% in 2030, a pace the broker described as below Octave's guidance of more than 10%. Barclays estimated total revenue growth of approximately 6% per year in the medium term, which it said is below the company's 6-8% guidance and about 5% under the Bloomberg consensus for fiscal 2030.
On valuation, Barclays noted that Octave traded at 17 times its 2027 estimated clean price-to-earnings ratio, around 11% below the peer group median. The analysts commented that "below-peer growth is already priced in and valuation is supportive."
In scenario analysis for Octave, Barclays' downside case put the share price at $12, about 29% below the closing price referenced in the bank's report. The upside scenario rose to $25, roughly 48% above that closing level.
Sector view
Barclays left its industry view on the European Software & Payments sector unchanged at "neutral." The published note therefore couples targeted company-level adjustments with a steady stance on the broader sector.