DnB Markets - Beijer Ref AB Class B (BEIJ B) Beijer Ref (Buy, TP: SEK440.00) - Solid Q1 bodes well for the future

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DnB Markets

Viktor Trollsten

EUR 90.62 For Business Accounts Only

Beijer Ref (Buy, TP: SEK440.00) - Solid Q1 bodes well for the future

In our view, Beijer Ref reported a solid Q1, with 7% organic growth and a 2% adj. EBIT beat versus consensus. Management indicated SEK16bn in sales in 2021e. Based on 20% drop-through, we estimate this could drive an 8.9% EBIT margin, while maintaining the Q1 M&A pace could add 8% to our 2021e EBIT. We have raised our 2021–2022e EBIT by 0–2% and our target price to SEK440 (430). We reiterate our BUY.

22/04/2021 15 EN

Underlying

Beijer Ref AB Class B

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SE0011116508 Nasdaq Nordic Stockholm Sweden

Provider

DnB Markets

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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Analysts

Viktor Trollsten

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We have raised our 2021–2022e EBIT by 8–9% following a strong Q2, which we believe supports the M&A and margin case. The company could continue to look for higher-margin targets, thereby improving the M&A payback profile and reducing margin dilution. In our view, EPS growth drivers appear to be in place with: 1) a strong organic growth outlook from pent-up demand and a solid drop-through of 19% on our estimates; 2) accretive margins from M&A (16% margin from M&A in Q2); and 3) additional value creation from M&A with the ‘new’ strategy of higher-margin targets. We reiterate our BUY and have rai...

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Beijer Ref (Buy, TP: SEK440.00) - Solid Q1 bodes well for the future

Beijer Ref (Buy, TP: SEK215.00) - Short-term pain, long-term gain

Beijer Ref (Buy, TP: SEK185.00) - Q2 supports M&A and margin story

Beijer Ref (Buy, TP: SEK165.00) - Set for strong earnings growth

Elkem (Hold, TP: NOK22.00) - Silicones overcapacity still an issue

Tomra (Sell, TP: NOK95.00) - Next stop, Poland

Arctic Bioscience (Hold, TP: NOK15.00) - HeROPA-trial results

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