Ambea (Buy, TP: SEK73.00) - Improving in a weak sector
Good underlying delivery, clouded by legacy problems related to the Norwegian part of the Aleris Care acquisition, was not enough in Q4, as the general welfare service market again came under scrutiny with Orpea’s quality failure. Ambea’s challenges appear more controllable, but we have revised our valuation using lower sector multiples and a higher DCF risk premium, and have cut our target price to SEK73 (92). As it still looks attractive to us, we reiterate our BUY.Ambea AB (publ) is a Sweden-based holding company within the care provider group. The Ambea group offers accommodation, support, training and staffing within health and social care. The Group has over 450 units throughout Sweden and in Norway. The Swedish operations comprise the brands Vardaga, Lara and Bemanning. Among other brands, there are Rent a Doctor, Rent a Nurse, Rent a Socionom and Careteam, as well as BoA Mellanvard. The Norwegian operations comprise support and residential care in disabilities and psychiatry through the companies Heimta and Vitale. The Company's main shareholders are ACTR Holding Ab and Actor General Partner SARL Sweden SCA. It operates Malrettet Intervensjon AS, Elevhalsan, Stod och Resurs AB and Tiltaksgruppa fokus as subsidiaries.
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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