DnB Markets - Epiroc AB Class B (EPI B) Epiroc (Buy, TP: SEK180.00) - Returns to EBIT growth

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DnB Markets

Olof Larshammar

EUR 465.57 For Business Accounts Only

Epiroc (Buy, TP: SEK180.00) - Returns to EBIT growth

We reiterate our BUY and have raised our target price to SEK180 (160). Epiroc enjoyed solid execution in Q4 despite a significant FX headwind. Adj EBIT was up by 6% YOY, driven by efficiency and improving organic growth. We also expect a high rate of new product launches in 2021, especially within underground equipment, which could drive growth and market share. Current mineral prices put fundamentals in place for miners to lift their opex and capex.

27/01/2021 21 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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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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July 21, 2021 July 21, 2021 19 EN

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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Genmab (Buy, TP: DKK2630.00) - Epinkly off to a good start in 2024

Q1 sales beat our forecast and consensus due to higher product-related royalties and solid Epkinly sales, while the operating profit margin was softer than expected owing to higher opex. Genmab reiterated the 2024 guidance for sales of DKK18.7bn–20.5bn, opex of DKK12.4bn–13.4bn, and operating profit of DKK4.6bn–7.1bn. We expect a strong pipeline of news flow in 2024. We reiterate our BUY and DKK2,630 target price.

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Linus Sigurdson

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Aker BP (Buy, TP: NOK290.00) - Capex concerns looming

While investor concerns appear tilted towards a near-term production decline, we are increasingly concerned that consensus FCF will face meaningful negative revisions, as capex assumptions beyond 2026 look far too low. For 2027–2030, our FCF estimates are ~40% below consensus. We reiterate our BUY, but have cut our target price to NOK290 (325) on a lower fair P/NAV.

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Epiroc (Buy, TP: SEK180.00) - Returns to EBIT growth

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

Genmab (Buy, TP: DKK2630.00) - Epinkly off to a good start in 2024

The weekly navigator

Aker BP (Buy, TP: NOK290.00) - Capex concerns looming

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