Industrivärden (Buy, TP: SEK300.00) - Value takes centre stage
While we expect a potential overhang from SHB’s proposed distribution of 30.5m Industrivärden A shares (~10% of its free float) short-term, our updated portfolio view implies 16% 12-month forward NAV growth. We calculate NAV growth is behind ~80% of total shareholder returns in the sector, and that this will more than offset a short-term increase in the discount to NAV to 15% (from 10%) we apply to our 12-month forward NAV/share of SEK349 for Industrivärden. This yields our new SEK300 (315) target price. We have upgraded Industrivärden to BUY (HOLD), and while some of our concerns remain, we expect it be a relative outperformer in the ongoing sector rotation from growth to value.AB Industrivarden is a holding company with an active ownership role in a concentrated selection of listed Nordic companies with good development potential. Co.'s mission is to create shareholder value based on a professional investment operation and active ownership in its portfolio companies. The goal is to generate high growth in net asset value over time.
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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