AAK (Buy, TP: SEK245.00) - Continued recovery expected
We expect a Q1 sales volume increase of 5.9% YOY, an adj. EBIT margin of 6.0%, and an EBIT/kg of SEK1.04 on a strong recovery from pandemic-related headwinds, easy comparables, and AAK being able to offset higher raw material costs with higher prices. We expect the sustained recovery in the past few quarters to have continued in Q1 and to further drive improved financial performance, supported by a shift in the portfolio mix. We reiterate our BUY and SEK245 target price. We see scope for higher multiples given the outlook, as the stock is trading at a 12-month forward P/E of c20x.AAK is a producer of high-value added vegetable oils and fats. Co. operates in three business segments: food ingredients, chocolate and confectionery and technical products and feed.
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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