Konecranes (Buy, TP: EUR46.00) - Modest growth in Service
We continue to have a positive view on Konecranes’ Service growth and cost-savings potential. Q1 provided modest growth in key Service metrics and we forecast accelerating growth in 2018e. The shares are trading at an EV/EBITA of 9.9x and 8.7x to our 2019e and 2020e forecasts, respectively, a c20% discount to the Nordic Capital Goods sector. We keep our BUY recommendation intact with a EUR46 target price.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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