UEFA Euro championship delayed

This latest delay and postponements of sports events leave few betting events in sports-books. The larger the betting exposure, the larger cuts we expect to consensus 2020e earnings. Conversely, we believe online casinos should hold up relatively well, (revenues coming from online casino: Kindred ~50%, Betsson ~70%, LeoVegas ~90%, NetEnt/Evolution 100%). Suspended/postponed events are a key near-term negative, but still temporary. This and the resilient online casino case make us believe the online gambling stocks will recover once focus returns to fundamentals.

Northern Lights

Kindred Group (Buy, TP: SEK75.00) - Set to bounce back in 2020

The US expansion is interesting, but it is still early days (GBP12m–13m EBITDA loss guided in 2020). Kindred must thus achieve earnings growth elsewhere, which we believe it will (20% EBITDA growth YOY in 2020e). 2021 should be more challenging given the Dutch re-regulation. We maintain our BUY and SEK75 target price on the good start to 2020 and promising outlook.

Metsa Board (Buy, TP: EUR11.00) - Scope for a revaluation

With ample evidence of improved demand for paper board and a better price outlook for market pulp, we believe earnings headwind has now turned into a tailwind. We also expect earnings to be driven by incremental volumes after capacity expansions at existing mills. After ambitious investments over the past three years, the company’s paper board capacity is up c25%, while its net long pulp position has increased by close to 30%. We have upgraded to BUY (HOLD) and raised our target price to EUR11 (7.7) on our increased estimates including higher dividends.

BioArctic (Buy, TP: SEK350.00) - Limited news on EU approval

The Q1 report was in line with expectations, with a small beat on the operating loss. The cash position at end-Q1 was nearly SEK1bn. There was limited news on the delayed EU approval (waiting on a SAG meeting). Eisai recently guided for Leqembi sales of JPY56.5bn (year to March 2025), implying royalties to BioArctic of cSEK360m. We reiterate our BUY and SEK350 target price.

Surgical Science (Buy, TP: SEK230.00) - Weaker than expected start to 2024

The weak Q1 results, with sales and adj. EBIT below our estimates, were largely due to a significant slowdown in Educational products. We have marginally revised our 2024–2026e on the strong management outlook for 2024, and reiterate our BUY and SEK230 target price. We believe the weak share price reaction on the report presents an opportunity for long-term investors.