Holmen (Sell, TP: SEK390.00) - Headwind from lower power prices
Due to falling electricity prices hitting profits from the spot-exposed renewable energy business and recent signals from peers of no pent-up demand for carton board and publication paper until Q4e, we have cut our 2023e EBIT by another 10%. We believe Holmen is in good shape, and still like its conservative but shareholder-friendly strategy of prioritising cash distributions. Nonetheless, given our view of very weak earnings momentum in the coming quarters and relatively high earnings risk, we have downgraded to SELL (HOLD) and cut our target price to SEK390 (460).
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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