DnB Markets - Epiroc AB Class B (EPI B) Epiroc (Buy, TP: SEK150.00) - Just out of the starting blocks

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DnB Markets

Olof Larshammar

EUR 92.37 For Business Accounts Only

Epiroc (Buy, TP: SEK150.00) - Just out of the starting blocks

We reiterate our BUY and have raised our target price to SEK150 (140). After six quarters of negative organic order intake growth YOY (Service up ~10%, Equipment down 45%), it turned positive in Q3. With high mineral prices laying the groundwork for miners to maintain high opex, we expect Epiroc to show among the strongest growth in the sector in 2021–2022. The balance sheet is solid, which could be used for M&A, in our view.

25/10/2020 19 EN

Underlying

Epiroc AB Class B

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SE0011166941 Nasdaq Nordic Stockholm Sweden

Provider

DnB Markets

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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Analysts

Olof Larshammar

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Epiroc (Hold, TP: SEK200.00) - Continued high activity

Ongoing high mineral prices have put the fundamentals in place for miners to maintain high opex. Longer-term, we like the secular growth from lower-ore grades, more underground mines, and electrification and digitalisation of equipment. However, in the short to medium term, we expect stable high-level order intake. In conjunction with the relative strong share price YTD, resulting in a rich relative valuation, we reiterate our HOLD and SEK200 target price.

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September 20, 2021 September 20, 2021 20 EN

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Epiroc (Hold, TP: SEK200.00) - Order intake still strong

Q2 order intake was strong, up 45% organically YOY and 6% above consensus. High minerals prices continue to put the fundamentals in place for miners to maintain high opex. Long-term, we like the case of secular growth from lower-ore grades, an increasing number of underground mines, and electrification and digitalisation of equipment. However, in the short to medium term, we expect a more stable order intake. Combining this with the rich relative valuation and strong share price performance YTD, we reiterate our HOLD and SEK200 target price.

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DnB Markets

Epiroc (Hold, TP: SEK200.00) - Time for a breather

We like the long-term case in Epiroc with secular growth from lower ore grades, more and more underground mines, and electrification and digitalisation of equipment. However, we have downgraded the stock to HOLD with a SEK200 (210) target price. We expect near-term equipment order intake to weaken somewhat from the high Q1 levels. Additionally, increased political risk in Chile and Peru could lead to a lower likelihood for new projects. Lastly, the stock outperformed the OMXS30 by 8% YTD and by 46% over the last year, which has left the valuation at a relative high level.

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Sinch (Buy, TP: SEK52.00) - New reporting structure implemented

With a new reporting structure, focus will be on headline numbers (the Q1 report is due at 07:30 CET on 7 May). We forecast 6% organic gross profit growth YOY, and we believe this is about in line with consensus. We reiterate our BUY and SEK52 target price.

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Stefan Gauffin

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Truecaller (Buy, TP: SEK46.00) - Facing easy comparables in Q1

We believe our Q1 revenue assumptions could prove conservative (results due at 07:30 CET on 7 May), but we are still 3% above consensus on sales and 5% above on EBITDA. We reiterate our BUY and have raised our target price to SEK46 (40) on higher peer multiples.

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Jørgen Lian

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Safe Bulkers Minor model adjustments

We have updated our estimates, owing to the Q1 report and its updated contract backlog at healthy rates providing visibility on cash flows for the coming quarters. The market is still pricing Safe Bulkers at c50% of NAV, which screens at a noticeable discount to peers’ average P/NAV of ~0.8x. This, along with its contract portfolio, continues to provide relatively attractive exposure to the dry bulk segment, despite potential downside risk to demand on fundamental drivers in China (importer of ~50% of all volumes). We do not consider these changes to be material, and we have not changed our BU...

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Epiroc (Buy, TP: SEK150.00) - Just out of the starting blocks

Epiroc (Hold, TP: SEK200.00) - Continued high activity

Epiroc (Hold, TP: SEK200.00) - Order intake still strong

Epiroc (Hold, TP: SEK200.00) - Time for a breather

Sinch (Buy, TP: SEK52.00) - New reporting structure implemented

Truecaller (Buy, TP: SEK46.00) - Facing easy comparables in Q1

Safe Bulkers Minor model adjustments

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