Nokian Tyres (Buy, TP: EUR21.00) - Longer-term growth story intact
We reiterate our BUY as we continue to like the longer-term growth story and solid balance sheet, which equips the company well to face near-term challenges. The Q1 report underscored that visibility remains low and near-term challenges remain high, but we believe a lot is already reflected in Nokian Tyres’ valuation at a 2021e EV/EBIT of 10.5x (15% discount to NTM 5-year average). We have cut our target price to EUR21 (22).Nokian Tyres is a tyre manufacturer. Co. mainly sells its products in the aftermarket. Co. and its subsidiaries include the Vianor tyre retail chain, which provides wholesale and retail services in Co.'s primary markets. The core business units in Co. and its subsidiaries are Passenger Car Tyres, which develops, manufactures, and markets summer and winter tyres for passenger cars and delivery trucks as well as SUVs; Heavy Tyres, which focuses on special tyres; as well as Vianor, which provides tyres for all vehicles: passenger cars, vans, trucks, and heavy machinery. In addition to Nokian-branded tyres, the Vianor tyre retail chain sells other tyre brands and a variety of motoring products.
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