DnB Markets - Instalco AB (INSTAL) Instalco AB (Buy, TP: SEK52.00) - Still-attractive valuation

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DnB Markets

Johan Skoglund

EUR 466.12 For Business Accounts Only

Instalco AB (Buy, TP: SEK52.00) - Still-attractive valuation

We believe accelerating negative organic growth YOY is well-reflected in consensus and market expectations ahead of the Q1 results. Furthermore, 2024 could mark a trough year for EPS should interest rate cuts materialise and sector activity pick up towards end-2024. We believe the stock continues to show attractive risk/reward, and reiterate our BUY and SEK52 target price.

16/04/2024 1 EN

Underlying

Instalco AB

Instalco AB Formerly known as Instalco Intressenter AB. Instalco Intressenter AB is a Sweden-based installation and service supplier within areas of heating and plumbing, electrical, ventilation, cooling and industrial solutions. The Company offers installation and regular repairs of district heating, plumbing replacement, new construction and preventive maintenance; design, installation, and maintenance of electrical installation; technical solutions and installation of ventilation solutions for air treatment, air conditioning and indoor climate; design, installation and maintenance of water sprinklers; industrial pipe systems, machinery installation and installations of cooling systems, as well as installation of switchgear, transformers, busbars and power stations, among others. The services are designed mainly for commercial premises, housing, public construction, warehousing, offices and retail trade, as well as process industries. The Company operates in Sweden, Norway and Finland through numerous subsidiaries.

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SE0009664253 Nasdaq Nordic Stockholm Sweden

Provider

DnB Markets

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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Analysts

Johan Skoglund

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Instalco AB (Buy, TP: SEK52.00) - Strong cash generation in Q4

We believe Instalco’s Q4 achieved satisfactory results, with net sales and EBITA 2% and 3% above our estimate, respectively. The EBITA margin held up well YOY and cash flow was strong. We reiterate our BUY, and have raised our target price to SEK52 (48) after rolling our valuation into 2024–2025.

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Instalco AB (Buy, TP: SEK48.00) - Expecting organic slowdown

We expect the softening Nordic construction market to have translated into negative organic growth YOY for Instalco after several strong years in a row. Even so, we believe the stock still offers an attractive risk/reward, and strong de-gearing capacity should support either continued M&A in 2024 or lower leverage. We reiterate our BUY and have raised our target price to SEK48 (46).

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Nokian Tyres (Hold, TP: EUR9.00) - Soft Q1, with or without setbacks

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Emil Jonsson

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Resurs Holding (Buy, TP: SEK18.00) - Resur-recting the case

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Instalco AB (Buy, TP: SEK52.00) - Still-attractive valuation

Instalco AB (Buy, TP: SEK52.00) - Strong cash generation in Q4

Instalco AB (Buy, TP: SEK48.00) - Expecting organic slowdown

Nokian Tyres (Hold, TP: EUR9.00) - Soft Q1, with or without setbacks

Lyko Group (Sell, TP: SEK95.00) - Stretched balance sheet

Resurs Holding (Buy, TP: SEK18.00) - Resur-recting the case

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