Kone (Buy, TP: EUR46.00) - Passed the trough – up to BUY
We have upgraded to BUY (HOLD), but reiterate our EUR46 target price, as we believe the recent sell-off (shares down 12% in October) offers a good entry point. In our view, this is a high-quality company, with c47% of sales from Services, a solid dividend yield (4–5%), and a strong balance sheet. We also believe that the shares will benefit from double-digit EBIT growth in 2019–2020e.KONE is an elevator and escalator industry group based in Finland. Co. is engaged in the provision of products and services for the installation, modernization and maintenance of elevators, escalators and automatic building doors. Co. provides its products and services throughout the entire lifecycle of the equipment, beginning from the installation of new equipment to the maintenance and modernization during their lifecycle and the full replacement of the equipment. Co.'s customers are active in industry segments such as residential, office, retail, public transportation, hotel, hospital, and marine.
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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