Axactor (Buy, TP: NOK40.00) - Q2 set for sequential improvement
We expect Q2 net profit of NOK5.5m (results due 07:00 CET on 24 July), representing a substantial pick-up from the EUR2.0m in Q1, driven by higher gross collections and scale benefits from a larger NPL book. We estimate Q2 capex of cEUR150m and the total estimated remaining collections (ERC) to have almost doubled over the past 12 months. We have cut our target price to NOK40 (50) after reducing our EPS estimates, primarily due to higher costs. We reiterate our BUY as we continue to find Axactor attractively priced at a 2020e P/E of 6x and believe it should be trading at the higher end of its peer group range, given its focused strategy and growth prospects.
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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