Huhtamaki (Buy, TP: EUR47.00) - Improving earnings prospects
We are c3% below post-Q4 Vara consensus on Q1e (results due at 07:30 on 25 April) sales and clean EBIT. Uncertainty around the pace of market recovery is testing investors, but leaves an attractive risk/reward in our view, as it is overshadowing expected improvements in the cost base. We reiterate our BUY and EUR47 target price, following small Q1 and FX-related estimate cuts. We continue to find NTM EV/EBIT of c12.7x (5-year average: c15.0) a good entry point.Huhtamaki is engaged in the packaging for food and drink. Co. and its subsidiaries have the following four segments: Foodservice Europe-Asia-Oceania, which provides single and double wall paper cups, paper and plastic plates and bowls, plastic cups, cutlery, and food-to-go packaging; North America, which serves local markets in North America with Chinet® disposable tableware products, foodservice packaging products, as well as ice cream containers and other consumer goods packaging products; Flexible Packaging, which produces packaging and labels; and Molded Fiber, which uses recycled fiber to make egg cartons and trays, fruit trays and cup carriers, as well as other protective packaging.
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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