Clas Ohlson (Buy, TP: SEK220.00) - Strong start to high season
Q2 earnings were largely in line with expectations, and the strong sales momentum seen so far this year continued in November, with a good Black Week for the company and a solid start to Christmas sales, which bodes well for Q3, its most important quarter of the year. Although external factors pose a headwind in the coming months, the strong sales momentum, along with a healthy inventory position, should be supportive for continued earnings growth (we forecast EPS growth of 15% for Q3). We reiterate our BUY and have raised our target price to SEK220 (210), mainly on higher estimates.Clas Ohlssen is a retailing company with sales in Sweden, Norway, Finland and the UK. At the end of the financial year, there were 157 stores in addition to the mail order/Internet service. Co. offers a range of products in the areas of electrical and electronics, mobile phones, computer accessories, hifi/stereo, tools, household, home and storage. Co. has 15,000 different products in its range. The range is divided into five different product areas: Hardware, Home, Multimedia, Electrical and Leisure. Co.'s product range is adapted and focused on meeting the needs of customers in their everyday lives.
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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