Borregaard (Buy, TP: NOK200.00) - Mitigating cost pressures
We expect Q3 EBITDA of NOK403m (results due at 07:00 CET on 21 October), hit by European gas prices doubling to EUR200/MWh, but with most of this offset by further price increases and a partial fuel switch to light oil. We have lowered our 2023–2024e EPS by ~2% due to increased cost pressure (mostly offset by price hikes). We reiterate our BUY but have cut our target price to NOK200 (250) on lower estimates and multiples contraction among high-quality speciality chemicals peers, which has reduced the value of several sub-segments in our SOTP.Borregaard is a supplier of specialized biochemicals for a global customer base. Co.'s main products are lignin-based products and specialty cellulose, but its product portfolio also extends to vanillin, bioethanol and fine chemicals. Co.'s products serve applications in a range of global end-markets including construction, agriculture, food and beverages, transportation and pharmaceuticals. Co.'s business model is closely linked to the integrated nature of its biorefinery in Norway, which utilizes the wood components to produce a portfolio of products. Co. operates in three business segments: Performance Chemicals, Specialty Cellulose and Other Businesses.
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.
Unfortunately, this report is not available for the investor type or country you selected.
Browse all ResearchPool reportsReport is subscription only.
Thank you, your report is ready.
Thank you, your report is ready.