Fjord1 (Buy, TP: NOK52.00) - Better safe than sorry
Fjord1 reported strong Q3 results but provided a cautious view on Q4, and 2019 is expected to be a transition year. We reiterate our BUY recommendation but have lowered our target price to NOK52 (55) to reflect slight estimate cuts and the recent market revaluation. We continue to find the valuation attractive at an 9x 2020e P/E with a record backlog above NOK30bn, which we believe is set to increase near-term with tenders worth NOK6.5bn up for grabs.Fjord1 is engaged in the business of passenger boats and ferries in Norway. Co.'s core activities focus on sea transport in the form of ferry and express-boat operations, as well as catering services. Co.'s activities also include travel agencies, as well as financial investments and property management. Co. is engaged in tourism activity in the West Norwegian fjords through its ownership of The Fjords DA.
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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