Netel Group Holding (Buy, TP: SEK20.00) - Deleveraging remains in focus
Q3 matched headline expectations and a record order backlog supports the 2023 guidance. However, as we await an improved cash conversion, gearing remains high and with escalating financial costs, we have cut our 2023–2025e EPS by 13–30%. We still see sound medium-term demand fundamentals and believe Netel should be able to re-establish its quality credentials with investors. We reiterate our BUY, but have reduced our target price to SEK20 (29), with the deflated valuation offering an investment opportunity.
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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