Borregaard (Buy, TP: NOK240.00) - Price increases and FX tailwinds
Q4 EBITDA was NOK398m, beating our estimate by 12% and consensus by 10%, largely driven by a strong quarter for BioSolutions. While Fine Chemicals is set to face pricing headwinds due to increased supply from Eastern Europe, we believe these challenges should be more than offset by incoming FX tailwinds and pricing adjustments in BioMaterials. We have raised our 2025–2026e EPS by 4%. We reiterate our BUY and have increased our target price to NOK240 (230).Borregaard is a supplier of specialized biochemicals for a global customer base. Co.'s main products are lignin-based products and specialty cellulose, but its product portfolio also extends to vanillin, bioethanol and fine chemicals. Co.'s products serve applications in a range of global end-markets including construction, agriculture, food and beverages, transportation and pharmaceuticals. Co.'s business model is closely linked to the integrated nature of its biorefinery in Norway, which utilizes the wood components to produce a portfolio of products. Co. operates in three business segments: Performance Chemicals, Specialty Cellulose and Other Businesses.
DNB Markets is the investment banking arm of DNB Bank ASA and is focused primarily on the Nordic region, as well as internationally on niches such as global shipping, energy and related services, and seafood. DNB Markets offers services in FICC, Equities and Investment Banking advisory from offices in Oslo, Stockholm, London, Singapore and New York. Equity research coverage is offered on c250 Nordic companies. DNB was ranked no.2 in Extel Nordic Research 2017. The DNB Markets’ Credit and FICC Macro & FX Research teams are repeatedly highly rated by Prospera Nordic Institutional Investor Surveys.
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