Alfa Laval (Hold, TP: SEK300.00) - A messy quarter
Although we view the 12% sell-off in Alfa Laval’s shares after its Q1 report as an overreaction, we reiterate our HOLD and have cut our target price to SEK300 (335). The Q2 guidance of somewhat lower demand QOQ is of little concern to us, as the Q1 base was higher than we expected. However, we believe the underlying miss on adj. EBITA might have been in double-digit territory after adjusting for a one-off inventory revaluation, which we estimate at close to SEK200m. We have cut our 2022e adj. EBITA by 5%.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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