Elkem (Buy, TP: NOK30.00) - Trading at a 50% discount to our SOTP
Elkem reported a cyclically low EBITDA but slightly above expectations. The outlook comments were also fairly in line with our estimates, which we have lowered c2–3% for 2019–2021 EBITDA due to Carbon. Elkem believes significant capacity cuts upstream (e.g. Ferroglobe) should support upstream pricing, offering support to our estimate of an c11% FCF yield for 2020. We reiterate our BUY and NOK30 target price.
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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