Beijer Ref (Buy, TP: SEK165.00) - Set for strong earnings growth
We believe Beijer Ref should enjoy solid quarters ahead given pent-up demand in refrigeration, strong HVAC growth in Europe and a big OEM order backlog, while operating leverage on higher volumes could yield higher margins. We estimate a SEK4.5bn M&A war chest could lead to 12% annual M&A growth in the coming years, and assuming 20% operating leverage on our 2021–2022e organic growth of 13–9% leaves our 2022e EBIT margin 60bp above consensus. We reiterate our BUY and have raised our target price to SEK165 (147), after lifting our 2021–2022e EBIT by 1–2%.
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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