Konecranes (Buy, TP: EUR47.00) - Service offers upside potential
Konecranes has set targets of a 2018–2020 sales CAGR of 5% and a 2020 EBITA margin of 11%, implying potential 2020e EBITA of ~EUR400m. We have raised our 2018–2019 Service and Port Solutions revenue estimates, and cut our 2019e Industrial Solutions EBITA margin. As a result, our 2018 and 2019 EBITA estimates are up 3% and 1%, respectively. We maintain our BUY recommendation and EUR47 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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