Axactor (Buy, TP: NOK30.00) - A scalable model awaiting scale
The Q3 a bottom line was largely in line with expectations. While the rate of collections appeared to have weakened, the lower than expected costs were positive, which bodes well for future earnings as Axactor builds scale. As a result of a flattening of the ERC curve, we now expect lower collections in 2020, but an improvement in 2021. The net effect is an EPS reduction of 9% in 2020e and an EPS uplift of 7% in 2021e. We reiterate our BUY and NOK30 target price.
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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