Latour (Buy, TP: SEK300.00) - Orders the key positive
Q1 saw solid acquisition-driven sales growth in Industrial Operations but with currency movements putting pressure on profitability; organic order intake growth was 10% YOY, supporting the near-term outlook, and the earnings call left us with a positive impression on the demand situation despite the ongoing uncertainty. We find Latour well placed to pass on the cost of potential tariffs to customers and see margin upside potential from the improved cost base once markets improve. We reiterate our BUY but have cut our target price to SEK300 (340) on: 1) NAV growth of 11% from its listed portfolio; 2) an EV/EBIT of 22x for its Industrial Operations; and 3) a 15% target premium to our 12-month forward NAV.Investment AB Latour is a mixed investment company. Co.'s operations are primarily carried out in two business lines: the wholly owned industrial operations and a portfolio of listed holdings. Co.'s wholly owned industrial operations consist of companies that develop, produce and market their own products in customer segments that represent considerable international demand. Co.'s investment portfolio consists of nine companies where it is the principal owner or one of the principal owners and where it controls at least 10.0% of the votes. In addition to the two principal business lines, Co. owns a number of part owned unlisted operations.
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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