Turnaround takes time

Europris (Hold, TP: NOK73.00) - Weak earnings trend

The Q3 results disappointed on weaker gross margins than expected and soft results from Sweden. We reiterate our HOLD, but have lowered our target price to NOK73 (75) after cutting our 2024e EPS by 4%. While we view Europris as attractively valued versus its Nordic peers, we believe it needs to reverse the negative earnings trend to restore investor confidence in its growth outlook.

AAK (Buy, TP: SEK360.00) - 2030 targets in focus

We are positive ahead of the CMD, scheduled to begin at 09:00 CET on 26 November, expecting AAK to raise its 2030 EBIT/kg target to >SEK3/kg and reiterate its ambition to outgrow the market in volumes and >10% EBIT growth p.a. We find consensus 2025–2026e EBIT low, at c3–5%, and believe clarity on structural margin improvements would be positive. We also expect focus on capital allocation, with AAK set to be net cash positive in early 2025e. We reiterate our BUY and SEK360 target price.

Elekta (Hold, TP: SEK69.00) - Still in ‘wait and see’ mode

During its Q1 call, Elekta indicated that H1 would be weaker than H2, and we believe this is reflected by consensus. For Q2, we forecast sales growth of c-5% YOY and organic growth of c-1% YOY. We expect order intake of cSEK4.9bn, broadly in line with consensus, and that the book-to-bill in Q2 should remain well above 1x. We are still cautious regarding Elekta’s longer-term performance, and reiterate our HOLD, while we have lowered our target price to SEK69 (76).

Valuation update

In this note, we show updated valuation statistics for the E&P sector