Industrivärden (Hold, TP: SEK300.00) - In line with the market, at best
We reiterate our HOLD and have raised our target price to SEK300 (290). We consider the stock close to fair valuation territory, as we: 1) forecast only 1% 12-month forward NAV growth (which drives 80% of the TSR in the sector); 2) see no near-term value catalysts; and 3) perceive a growing risk that its 5% discount to NAV could widen towards its historical average of 10%, given that Industrivärden offers a 100% static listed and easily replicated portfolio, while seasonal patterns discount expansion following the dividend season. We believe consensus could increasingly focus on the all-time low discount to NAV, which could fuel estimate reductions in the near term.
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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