FX and M&A behind 2% EBITA miss

Beijer Ref (Buy, TP: SEK182.00) - Upgraded to BUY

We have upgraded Beijer Ref to BUY (HOLD) as we see an opportunity in this potential double-digit earnings growth story at what we view as a reasonable valuation given the recent share price weakness (-c14% in the past six months). We expect the OEM business and potential M&A to remain the main growth engines for the story and note a solid balance sheet and cash flows. We have left our adj. EBITA broadly unchanged for 2025–2026e, but have updated our valuation and raised our target price to SEK182 (172).

Rate cuts and Q4 reports

This week, the ECB and Riksbank cut policy rates, and Atrium Ljungberg and Platzer kicked off the Q4 reporting season. Balder’s associated company, Norion Bank, is under further scrutiny by the Swedish FSA for suspected AML violations, and we recently updated our PPI estimates following the company’s announced investments. The weighted-average implied EBITDA yields on the stocks we cover are 4.44% for 2024e and 4.91% for 2025e.

Weekly news, topics & discussion

The E&P Q4 reporting season got under way this week. Despite a solid report, we believe OKEA’s results were overshadowed by the absence of any plan to start paying dividends again. Also, Vår Energi’s trading update revealed soft Q4 production and realised prices, and we continue to see meaningful downside risk to consensus 2025e production. Meanwhile, BlueNord said Tyra is now expected to reach plateau production in February.