Konecranes (Buy, TP: EUR48.00) - Particularly attractive entry point
We are 2% above consensus on Q3e adj. EBITA (results due at 9:00 EET on 25 October). We now have a more cautious view on industrial crane demand and pricing in 2019–2020, and have cut our EBITA forecasts by 2–3%. The stock is trading at an c10% discount to Nordic Capital Goods on EV/EBIT and c20% on P/E (12-month forward), which we deem unjustified given our view of earnings potential from service growth and cost synergies. We keep our BUY recommendation but have trimmed our target price to EUR48 (50).Konecranes reports two business areas, Service and Equipment, as its primary business segments. Co.'s Service business area provides maintenance and modernization services for all types and brands of industrial cranes, lifting equipment, and machine tools. Co.'s service offering covers inspections, preventive maintenance programs, repairs and improvements, on-call service, spare parts, modernizations, and a range of consultation services. Co.'s Equipment business area provides components, cranes, and material handling solutions for a range of customers. As its secondary segments, Co. reports three geographical areas: Europe, Middle East and Africa; Americas; and Asia-Pacific.
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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