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.

Metsa Board (Buy, TP: EUR11.00) - Scope for a revaluation

With ample evidence of improved demand for paper board and a better price outlook for market pulp, we believe earnings headwind has now turned into a tailwind. We also expect earnings to be driven by incremental volumes after capacity expansions at existing mills. After ambitious investments over the past three years, the company’s paper board capacity is up c25%, while its net long pulp position has increased by close to 30%. We have upgraded to BUY (HOLD) and raised our target price to EUR11 (7.7) on our increased estimates including higher dividends.

BioArctic (Buy, TP: SEK350.00) - Limited news on EU approval

The Q1 report was in line with expectations, with a small beat on the operating loss. The cash position at end-Q1 was nearly SEK1bn. There was limited news on the delayed EU approval (waiting on a SAG meeting). Eisai recently guided for Leqembi sales of JPY56.5bn (year to March 2025), implying royalties to BioArctic of cSEK360m. We reiterate our BUY and SEK350 target price.

Surgical Science (Buy, TP: SEK230.00) - Weaker than expected start to 2024

The weak Q1 results, with sales and adj. EBIT below our estimates, were largely due to a significant slowdown in Educational products. We have marginally revised our 2024–2026e on the strong management outlook for 2024, and reiterate our BUY and SEK230 target price. We believe the weak share price reaction on the report presents an opportunity for long-term investors.