Refinancing and dividend path is clearing

Energy Morning - 31 October 2024

Demant (Buy, TP: DKK330.00) - Lower end of 2024 guidance likely

In its Q3 trading update, Demant ended at organic revenue growth of c2% (below our forecast and consensus), owing to a soft performance in Hearing Aids and Diagnostics. The 2024 guidance was confirmed, but we find the lower end more likely. However, we note a historically high valuation gap between Demant and Sonova. We reiterate our BUY but have cut our target price to DKK330 (360).

DNB (No_rec, TP: NOK) - Focus on key 2027 financial targets

With 2022–2024 YTD ROEs of ~15–17%, DNB has continuously hit its >13% target set in 2022, with ample headroom. While expecting some margin pressure, we believe still-high interest rates, capital-light revenue momentum and robust asset quality bode well for continued strong earnings generation. At the CMD scheduled for 19 November, we expect the main focus to be on the new financial targets towards 2027, and see scope for its ROE target to be raised to >14%.

ALK-Abello (Buy, TP: DKK190.00) - Should be another strong quarter

We expect another solid quarter for ALK, driven by continued strong European tablet sales momentum (we estimate c25% organic growth YOY, versus c35% in Q2). In the event our European tablet estimates prove conservative, we believe the full-year guidance could be raised for the fourth time this year. We reiterate our BUY and DKK190 target price.