Humana (Buy, TP: SEK73.00) - FCF generation re-established
Humana took another step in re-establishing its quality operational credentials, with Q3 organic growth of 4.4% YOY and EBIT margin expansion of 120bp with all units now contributing. FCF generation is back on track and we find strong value support at a 2019e FCF yield of 9.5% (11.2% pre-expansion capex). We reiterate our BUY and SEK73 target price, and see further upside potential in the re-emerging growth case organically, through new openings, and financial headroom for more value-enhancing acquisitions.Humana AB is a Sweden-based care provider. It operates through four segments: Individual & Family, Personal Assistance, Elderly Care and Other Nordics. The Individual & Family segment provides psychosocial disorders and mental illness care. The Personal Assistance segment provides personal assistance to people with functional disabilities. The Elderly Care segment provides housing for the elderly. The Other Nordics segment covers the Company's developing market operations in the area. It operates in Sweden, Norway, Finland and Denmark.
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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