Kongsberg Gruppen (Hold, TP: NOK180.00) - Strong backlog into 2021e
Kongsberg Gruppen saw a solid end to the year, with Q4 EBITDA some 4% above consensus, and an order backlog of NOK37bn at end-2020. The proposed DPS for 2020 was NOK10 (we forecast NOK6), consisting of an ordinary DPS of NOK3, an extraordinary DPS of NOK5, and NOK2 in share buybacks. We have made only minor positive estimate changes on the back of the results, raising our 2021–2022e EPS by 2%. We still expect stable earnings improvements in 2021–2022, but believe much of this is already priced in, at a 2021e P/E of 17x (15x when adjusting for the net cash position). We reiterate our HOLD and NOK180 target price.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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