Carlsberg (Sell, TP: DKK850.00) - Tough comparables ahead
Despite continued strong momentum in Asia, we believe this summer’s bad weather, tough comparables, and competitive pressure in Russia could result in only c1.7% organic revenue growth YOY in Q3 (the trading update is due at 07:00 CET on 31 October – volume and top-line numbers only). Despite a strong H1 performance, we do not expect Carlsberg to lift its FY guidance of high single-digit organic EBIT growth (we forecast c9.2%), with EBIT growth set to slow in H2. We reiterate our SELL and DKK850 target price.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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