EBITDA 2% below on higher cost

Norsk Hydro (Sell, TP: NOK50.00) - 30% below 2025e EPS consensus

We expect aluminium prices to come down with falling global energy prices, and reiterate our SELL and NOK50 target price. We are 30% below consensus on 2025e EBITDA; we do not see large enough demand to raise aluminium prices above the marginal producer’s cost, as suggested by the price appreciation in recent weeks, we believe. We expect Q1 EBITDA of NOK6.2bn (results due at 7:00 CET on 24 April), driven by high hydropower production volumes in the quarter. We have reduced our 2025–2026e EPS by ~1%, primarily on lower electricity price futures.

Norsk Hydro (Sell, TP: NOK50.00) - Little support for 22% EPS growth

Q4 EBITDA was 13% below consensus and we consider consensus 2023–2026e EPS CAGR of 22% too high (NOK7.8 in 2026e). Norsk Hydro’s earnings are closely linked to energy prices, and we expect global energy prices to continue to decline. Annually, EPS averaged NOK2.2 in the 10 years prior to Russia’s invasion of Ukraine, with lower energy prices. We have cut our 2024-2025e aluminium price forecast by USD50/t and our Norwegian electricity price by EUR10/Mwh, and our 2024–2025e EPS by 6–9%. We reiterate our SELL and have reduced our target price to NOK50 (55).

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).