Kongsberg Gruppen (Hold, TP: NOK150.00) - Tackling the first leg of the downturn
Kongsberg Gruppen reported Q1 results well above our and market expectations on most P&L lines. The result showed little impact from the Covid-19 outbreak, a trend that according to management continued in April, although we may see more effects in the next few quarters. After the strong order backlog and margins in Q1, and following a change of analyst, we have raised our 2021e EPS by 6%, and our target price to NOK150 (140). We reiterate our HOLD, as we find the stock fairly priced at a 2021e P/E of 12x.Kongsberg Gruppen supplies technology systems and solutions to customers engaged in the oil and gas industry, the merchant marine, and the defense and aerospace industries. Co.'s operating segments are Kongsberg Maritime, which delivers products and systems for commercial vessels and offshore installations, as well as for seabed surveys, surveillance, training simulators and fishing vessels and fisheries research; Kongsberg Defence Systems, a supplier of defence and space-related systems; Kongsberg Protech Systems, which provides weapon guidance system Protector RWS for military use; and Kongsberg Oil & Gas Technologies, a supplier of solutions to the international oil and gas industry.
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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