MGI’s Q1 revenues came in lower than our estimates, but operating profit surprised to the upside. Operating cash flow meanwhile was weak but should improve as the year continues. We believe that MGI can reduce their debt load even in a tougher ad market and we see clear upside from low valuation as ad spending picks back up. We therefore reiterate our Buy recommendation but lower the target price to SEK 22 (prev. SEK 26) to reflect changes in estimates and an increase in WACC.

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