Dometic (Buy, TP: SEK80.00) - Less risk warrants higher valuation
We reiterate our BUY and maintain our SEK80 target price. Key takeaways from the report: 1) Q1 lowered balance sheet risk amid a new bank agreement and Q1 EBIT 20% above our estimates; 2) Customers are starting up production again and demand in May and June is set to be better than at the start of April; and 3) In our view, the valuation versus Swedish Capital Goods peers should normalise as balance sheet risk is reduced, which suggests additional 20% share price performance.Dometic Group AB serves the market with a range of air conditioners, refrigerators, awnings, cookers, sanitation, lightning, mobile power equipment, windows, doors and other comfort and safety products. The products are sold in approximately 100 countries and are mainly produced in wholly owned production facilities around the world.
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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