Alfa Laval (Hold, TP: SEK360.00) - Capex uplift underlines green story
The most interesting takeaway from Alfa Laval’s Q3 report was the near doubling of its capex guidance for the next three years. Most details will be offered at the 30 November CMD, but we believe the higher spending will underline the potential in Alfa Laval’s attractive clean-tech exposure. With the shares trading at a 2022e EV/EBIT of c20x, however, we believe an ‘ESG premium’ is reflected in the price. We reiterate our HOLD, but have lifted our target price to SEK360 (355).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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