Axactor (Buy, TP: NOK7.50) - Reducing refinancing risk
Axactor has initiated a set of financial targets for 2023 and beyond, focusing on profitability, investment capacity and shareholder returns. Its 9% ROE for 2023 was not far from 2023–2024 consensus but was announced along with planned 2023 investments of EUR100m–150m, a sharp reduction from EUR288m in 2022. This seems partly driven by portfolio prices not fully reflecting increased funding costs, but also to leave some headroom for the upcoming EUR170m bond maturity. Although we have cut our 2023–2024e EPS by 13–19% on its plans to reduce investments, we find it positive that the funding risk is being addressed. We reiterate our BUY but have lowered our target price to NOK7.5 (8.0).
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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