Fortum (Hold, TP: EUR18.60) - Hydro-heavy Q1
Cold weather and high costs for coal-powered generation have driven Nordic power prices to levels not seen in four years. Hydro reservoir drawdown in Sweden and Finland indicates very strong volumes from Fortum’s hydro fleet in Q1e. Nordic reservoirs are now well below normal levels, suggesting further pricing support, but Fortum’s cautious hedging limits ASP upside for 2018e–2019e. We maintain our HOLD recommendation, with a EUR18.6 (18.8) target price ahead of the Q1 results due at 08:00 CET on 26 April.
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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