FLSmidth (Hold, TP: DKK410.00) - Q1 consensus looks challenging
FLS will report Q1 results at 12:00 CET on 2 May. We are 11% below consensus EBITA, as we see weaker sales mix in Product Companies, higher operating costs, and adverse FX weighing down profitability. With consensus too optimistic on the near-term and valuation offering only limited upside, we have downgraded our recommendation to HOLD (BUY), but keep our target price at DKK410.FLSmidth & Co. is a supplier of equipment and services to the global cement and minerals industries with a local presence in 50 countries including project and technology centers in Denmark, India, USA and Germany. Co. supplies everything from single machinery to complete cement plants and minerals processing solutions including services before, during and after the construction. Co.'s in-house resources are primarily engineers who develop, plan, design, install and service equipment, with most of the manufacturing being outsourced to subcontractors.
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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