Fortnox (Buy, TP: SEK84.00) - Moving to easier comparables
The bright spots from Fortnox’s Q2 results were 30% EPS growth YOY despite macroeconomic headwinds, and despite lending-based revenues up 64% YOY from a higher base, cash conversion improved to a 38% adj. FCF margin. Fortnox is likely to have to beat consensus for the stock to re-rate, but as it is trading close to trough valuation multiples, we see its seasonally strong Q3e as a potential catalyst, with sales and EBIT growth acceleration to 32% and 40% and a reversal of negative calendar swings setting up strong FCF aided by an expected macroeconomic recovery, easier comparables, and incremental growth from new products. We reiterate our BUY and SEK84 target price, having cut our 2024–2025e EBIT by 4–0%, but remain 4–12% above Bloomberg consensus.
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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