Northern Lights

NetEnt (No_rec, TP: SEK) -

In light of Evolution’s acquisition of NetEnt, we have discontinued coverage of NetEnt. Our last published recommendation, target price and estimates should no longer be relied upon.

NetEnt (Hold, TP: SEK94.00) - Awaiting deal closure

As we near Q3 results (due at 07:30 CET on 22 October), we keep our HOLD and SEK94 target price, subsequent to our views on Evolution Gaming (EG) after its all-share bid for NetEnt. We expect Q3 revenue growth of >20% and EBITDA growth of >40% YOY, driven by a strongly performing Red Tiger and cost synergies. The UK authority is reviewing the potential EG/NetEnt combination and the acceptance period for NetEnt shareholders ends on 30 October.

Boliden (Buy, TP: SEK420.00) - In a sweet spot

Despite low mining volumes, the Q1 results were close to our expectations, thanks to good cost control. We have made significant estimate increases on better metal price and FX assumptions, and beyond 2024 we continue to see additional earnings support from: 1) higher mining volumes due to richer metal grades; 2) normal operations at Rönnskär; and 3) growing profits from the Odda smelter. Our spot-based estimates for 2027 translate to an EV/EBIT of 5.2x, but we see significant upside potential to our forecasts on our view of a promising outlook for copper and gold. We have raised our target pr...

Beijer Ref (Hold, TP: SEK156.00) - Building (cash flow) confidence

We have increased our cash flow estimates but have made moderate underlying forecast changes after the Q1 report. Inclusion of recent M&A and updated FX has led us to raise our adj. EBITA by c3% on average for 2024–2026e. We have raised our target price to SEK156 (152) due to our model changes and updated peer multiples. We reiterate our HOLD and see limited upside potential given the valuation seems on the high side.

Epiroc (Buy, TP: SEK230.00) - Mix headwind, benefits to come

Similar to Sandvik’s Mining business, the main miss in Epiroc’s Q1 was the soft margin, albeit for different reasons. Sandvik pointed to the unfavourable timing of equipment deliveries, while Epiroc alluded to a pure mix issue (high share of equipment, low share of service). Only small benefits from Epiroc’s cost measures have started to show – we expect more to be gradually realised through 2024. We have trimmed our 2024–2026e adj. EBIT by 1% on average. We reiterate our BUY, but have lowered our target price to SEK230 (235).