Fortum (Hold, TP: EUR18.80) - Lack of short-term triggers
Q4 adjusted EBIT was 3% above consensus driven by solid achieved wholesale power prices and a favourable generation mix. The proposed EUR1.10 DPS was in line with consensus and our forecast, but we see the continued high capex spending raising the risk of a dividend cut in 2018–2020e. We have lowered our target price to EUR18.8 (19.8) and downgraded the stock to HOLD (BUY). We see a lack of short-term share price catalysts, as the Uniper deal is all but finalised, and the dividend outlook has been communicated to the market.
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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