Carlsberg (Sell, TP: DKK720.00) - Focus set to be on capital allocation
We view the current 2018 guidance as attainable, and thus believe focus with the H2 results (due at 07:00 CET on 6 February) will be on any update on capital allocation and the 2019 outlook. We expect a 2019 of mid-single digit organic EBIT growth, and that Carlsberg could initiate annual buybacks averaging DKK5bn. We have raised our EPS estimates accordingly, and lifted our target price to DKK720 (670), but reiterate SELL.Carlsberg is engaged in the production and sale of beer and other beverages. Co.'s brewing operations are concentrated in Northern and Western Europe, Eastern Europe and Asia, while markets outside these regions are serviced through exports and production under license. Co.'s other beverages include soft drinks, water and cider. In addition to beverage activities, Co. is also engaged in real estate.
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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