GARO (Buy, TP: SEK60.00) - Expecting volume dip and price rises
We expect the downturn in the Nordic construction sector to continue hampering Electrification growth and margins in Q3, and E-Mobility growth to slow somewhat due to a slight delay in Entity Compact deliveries. However, we see some support for EBIT from the price rises in July despite lower volumes, and multiples are at all-time lows. We reiterate our BUY but have cut our target price to SEK60 (65).
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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