Axactor (Buy, TP: NOK8.00) - Unwarranted discount
Axactor reported Q3 pre-tax profit of EUR14m and a 5% YOY in increase in gross revenues, due to continued solid collections and 3PC activity. With unsecured collections of around 100% for several quarters and the investment pace picking up, we see an improved outlook for Axactor. Management is well on track to reach its 2022 NPL investment target with profitability of new portfolios set to be higher than the back-book. Despite making only limited 2023–2024 estimate revisions, we have raised our target price to NOK8 (5.5) and upgraded to BUY (HOLD) as we view a 2023e P/E of below 4x as unwarranted given the improved risk/reward.
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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