Coor Service Management (Buy, TP: SEK57.50) - Reset DPS allows for future growth
We believe Coor improved in Q4, well-offsetting the lost Ericsson contract, with its model still showing strong FCF. We have only tweaked our 2024–2026e EPS. We continue to like its FCF profile, low operating risk, scope for value-enhancing acquisitions, and strong yield support, with the reset 2023 DPS of SEK3.00 (7.2% yield) allowing for de-gearing towards 2x net debt/EBITDA and a 2024–2026e DPS growth scenario. We reiterate our BUY and have raised our target price to SEK57.5 (56).Coor Service Management Holding AB is a Sweden-based company engaged in the business support services industry. The Company specializes in integrated facility management (IFM), including both soft and hard kinds of services, such as cleaning, reception, catering, post and parcel, strategic consulting and others. The services can be offered as single or package. The Company operates across Sweden, Finland, Norway and Denmark.
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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