Alfa Laval (Buy, TP: SEK445.00) - Marine margins set to recover
We are 1–2% above consensus on Q3e orders, sales and adj. EBITA and believe focus should mainly be on order intake and potential improvement in Marine margins. We have raised our 2024–2025e adj. EBITA by c2% (driven by positive FX effects and higher assumptions for capacity expansion in Energy) and are now c10% above consensus for both years. We like the story and find the valuation attractive at a 2024e EV/EBIT of 13.5x. We reiterate our BUY and have raised our target price to SEK445 (440).Alfa-Laval AB is a supplier of products and solutions in the technologies of heat transfer, separation and fluid handling. Co.'s equipment is used to heat, cool, separate and transport products in industries that produce food, beverages, fuel, chemicals, pharmaceuticals, starch, sugar and ethanol. They are also used aboard vessels, in power plants, in the engineering industry, for treating sludge and wastewater, for heating and cooling, and others. Co.'s products include: air heat exchangers, plate heat exchangers, shell-and-tube heat exchangers, thermal fluid systems, boilers, decanters, belt filter presses, high-speed separators, membrane filtration, pumps and valves, and tank equipment.
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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