Boliden (Buy, TP: SEK305.00) - Capex update set to be in focus
We have raised our 2020–2021e adj. EBIT by 7% on marked-to-market metal prices and FX, and expect a solid Q3 report (due 28 October). We forecast earnings up 39% QOQ, mainly driven by higher net metal prices and FX, and seasonally lower costs, partly offset by lower volumes and maintenance stops. We are 5% above Factset consensus on adj. EBIT. In our view, the main focus is set to be the capex update; we note capex is running below the SEK7bn guidance. We reiterate our BUY, and have raised our target price to SEK305 (290).Boliden AB produces base metals such as zinc, copper and lead for industrial customers throughout Europe. Co.'s operations are conducted within two business areas, namely Mines and Smelters. Co.'s mining operations comprise eight mines located in four areas: Aitik, the Boliden Area and Garpenberg in Sweden, and Tara in Ireland. Co.'s exploration focuses on deposits that contain zinc, copper and precious metals. Co.'s smelters comprise the Kokkola and Odda zinc smelters, the Ronnskar and Harjavalta copper smelters, and the Bergsoe lead smelter. Co.'s smelters, Ronnskar, Harjavalta, Kokkola, Odda and Bergsoe, produce pure metals, customized alloys, and by-products such as sulphuric acid.
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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