Borregaard (Hold, TP: NOK100.00) - Holding up well despite headwinds
Borregaard reported slightly soft Q1 results with an EBITDA of NOK242m versus our estimate of NOK299m and Bloomberg consensus of NOK295m. As part of the miss appears to have been mostly one-off items and the company has left its guidance largely unchanged, we have reduced our 2021 EPS estimates by only c3%. Following a change of analyst, we reiterate our HOLD and NOK100 target price as we find the stock fairly valued at an EV/EBIT of 11.6x.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.
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