Klövern (Hold, TP: SEK11.60) - Q3 in line, underlying above
The Q3 results were broadly in line with our forecasts and consensus. However, as interest rate hedges dropped to SEK8bn (or c27%) of NIBD, we have cut our 2019e financing costs due to a higher ratio of short-term interest rates (and raised financial risk), but raised our 2020e on updated market interest rates. Given the short hedging ratio (2.8-year duration) and common shares ratio of only 18.6% in Q1 2019e, post thex potential takeover of Agora, we find the financial risk high. We repeat our HOLD recommendation and SEK11.6 target price.
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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