Loomis (Buy, TP: SEK320.00) - Quality at distressed valuation
Loomis’s Q2 US performance impressed, and the European challenge has eased since lockdowns were relaxed, setting up a strong earnings recovery case for H2 in our view. Solid financials allow the company to look for new opportunities. After rolling over our valuation to 2021e, we have raised our target price to SEK320 (300), despite cuts to our forecasts related to FX and non-cash items. We reiterate our BUY, with the shares in deep-value territory. We also see prospects of the board reinstating the dividend, indicating a Q4, yield of 5.3%.Loomis AB is a holding company. Through its subsidiaries, Co. provides solutions for cash handling in the U.S., majority parts of Europe and in Argentina. Co. provides cash in transit (CIT), cash management services (CMS) and solutions which integrate CIT with CMS. The CIT service transports cash to and from stores, banks and automated teller machines (ATMs). The CMS service counts, quality controls and packages bills and coins in Co.'s cash centers. Co. also provides solutions for retail outlets and for maintenance of ATMs, as well as analysis, forecasting and reporting of customers' cash flow. The services are targeted at banks, retailers, commercial enterprises and the public sector.
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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